Shell finalizes redevelop Penguins field in UK North Sea

Shell finalizes to redevelop Penguins field in UK North Sea

10:16 AM, 16th January 2018
Logo of the company Shell seen at a retail site in US. (File photo)
Logo of the company Shell seen at a retail site in US. (File photo)

THE HAGUE, NETHERLANDS: Royal Dutch Shell plc (Shell) announced a final investment decision on the redevelopment of the Penguins oil and gas field in the UK North Sea.

The decision authorises the construction of a floating production, storage and offloading (FPSO) vessel, the first new manned installation for Shell in the northern North Sea in almost 30 years.

The redevelopment is an attractive opportunity with a competitive go-forward break-even price below $40 per barrel. The FPSO is expected to have a peak production (100 percent) of circa 45,000 boe/d.

The Penguins field currently processes oil and gas using four existing drill centres tied back to the Brent Charlie platform. The redevelopment of the field required when Brent Charlie ceases production will see an additional eight wells drilled, which will be tied back to the new FPSO vessel. Natural gas will be exported through the tie-in of existing subsea facilities and additional pipeline infrastructure.

The Penguins field is in 165 meters (541 feet) of water, approximately 150 miles northeast of the Shetland Islands. Discovered in 1974, the field was first developed in 2002 and is a joint venture between Shell (50 percent and operator) and ExxonMobil (50 percent).

A joint venture-owned/Shell-operated Sevan 400 FPSO has been selected as the development option for the field. Oil will be transported via tanker to refineries and gas will be transported via the FLAGS pipeline to the St Fergus gas terminal in north-east Scotland.

“Penguins demonstrates the importance of Shell’s North Sea assets to the company’s upstream portfolio. It is another example of how we are unlocking development opportunities, with lower costs, in support of Shell’s transformation into a world-class investment case,” said Andy Brown, Upstream Director, Shell.

“Shell has had a strong presence in this part of the northern North Sea for more than forty years. Having reshaped our portfolio over the last twelve months, we now plan to grow our North Sea production through our core production assets. In doing so, we will continue to work with the UK government, our partners and the regulator to maximise the economic recovery in one of Shell’s heartlands,” added Steve Phimister, Vice President for Upstream in the UK and Ireland.

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