Shell Offshore has taken the final investment decision to proceed with the development of the Vito deep-water project located over four blocks in the Mississippi Canyon area in the US Gulf of Mexico (GoM).
The decision, which is based on an estimated break-even price of less than $35 per barrel, paves the way for the construction and fabrication of a new, simplified host design and subsea infrastructure.
As part of the Vito development, the company will develop eight subsea wells with a deep in-well gas lift.
The field, which is expected to deliver its first oil in 2021, is located at a depth of more than 4,000ft of water, around 150 miles south-east of New Orleans.
According to the company, the Vito development has estimated a recoverable resource of 300 million barrels of oil equivalent (boe), while its peak production is expected to be around 100,000boe per day.
Shell upstream director Andy Brown said: “With a lower-cost developmental approach, the Vito project is a very competitive and attractive opportunity industry-wide.
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“Our ability to advance this world-class resource is a testament to the skill and ingenuity of our development, engineering and drilling teams.”
Though the cost of the development was not disclosed, Shell reduced the cost estimates by more than 70% from the original concept.
The company attributed the cost savings to factors such as the simplified design, as well as collaboration with vendors in multiple areas, including well design and completions, subsea, contracting, and topsides design.
Shell operates the project with a 63.11% interest, while Statoil USA E&P holds the remaining 36.89%.
The field is set to be Shell’s 11th deep-water host in the Gulf of Mexico.