Royal Dutch Shell is set to advance the Appomattox deepwater development in the Gulf of Mexico after announcing the final investment decision (FID).
Following its decision the company will construct and install its eighth and largest floating platform in the Gulf of Mexico.
The project will be located 129km offshore of Louisiana, and includes capital for the development of 650 million barrels of oil equivalent (boe) resources at Appomattox and Vicksburg, with start-up estimated around the end of this decade.
Average peak production from the Appomattox development, which will initially produce from the Appomattox and Vicksburg fields, is expected to reach around 175,000boe per day.
Shell will own the platform and the Appomattox and Vicksburg fields with 79% and the remaining 21% would be owned by CNOOC’s wholly owned subsidiary Nexen Petroleum Offshore.
Shell Upstream Americas director Marvin Odum said: "We have again delivered a globally competitive investment scope for another significant deepwater project.
"Appomattox opens up more production growth for us in the Gulf of Mexico, where our production last year averaged about 225,000boe per day, and this development will be profitable for decades to come."
The company reduced the total project cost by 20% during design work for Appomattox through supply chain savings, design improvements, and reducing the number of wells required for the development.
The cost reduction programme included advancements from previous four-column hosts, such as the Olympus tension-leg platform, in addition to ensuring a high-degree of design maturity prior to commencing construction.
Shell Pipeline also made a final investment decision on the 24in Mattox Pipeline that will transport crude oil from the Appomattox host to an existing offshore structure in the South Pass area.
Image: Shell will advance the Appomattox deep-water development in the Gulf of Mexico. Photo: courtesy of Royal Dutch Shell plc.