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HOUSTON, July 26, 2021 /PRNewswire/ -- Shell Offshore Inc., a subsidiary of Royal Dutch Shell plc, today announces the final investment decision (FID) for Whale, a deep-water development in the U.S. Gulf of Mexico that features a 99% replicated hull and an 80% replication of the topsides from our Vito project.
"Whale is the latest demonstration of our focus on simplification, replication and capital projects with shorter cycle times to drive greater value from our advantaged positions," said Wael Sawan, Shell Upstream Director. "We are building on more than 40 years of deep-water expertise to deliver competitive projects that yield high-margin barrels so that we are able to meet the energy demands of today while generating the cash required to help fund the development of the energy of the future."
Whale will be the second Shell-operated deep-water development in the Gulf of Mexico to employ a simplified, cost-efficient host design. With this development approach, Shell anticipates an internal rate of return estimated to be greater than 25%. Our Whale development will feature energy-efficient gas turbines and compression systems. This development will be the latest addition to our Gulf of Mexico portfolio where our production is among the lowest greenhouse gas (GHG) intensity in the world for producing oil.
The Whale development, owned by Shell Offshore Inc. (60% operator) and Chevron U.S.A. Inc. (40%), is expected to reach peak production of approximately 100,000 barrels of oil equivalent per day (boe/d) and currently has an estimated, recoverable resource volume of 490 million boe. Whale will be Shell's 12th deep-water host in the Gulf of Mexico and is currently scheduled to begin production in 2024.
Shell's Powering Progress strategy to thrive through the energy transition includes increasing investment in lower carbon energy solutions, while continuing to pursue the most energy-efficient and highest-return Upstream investments.
Cautionary note
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this announcement "Shell", "Shell Group" and "Group" are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words "we", "us" and "our" are also used to refer to Royal Dutch Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. "Subsidiaries", "Shell subsidiaries" and "Shell companies" as used in this announcement refer to entities over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as "joint ventures" and "joint operations", respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as "associates". The term "Shell interest" is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.
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