Shell to invest in the US GoM Whale development

Source: press release, 26 July 2021

photo: Shell plc
photo: Shell plc

Shell Offshore Inc., a subsidiary of Royal Dutch Shell plc, has announced the final investment decision (FID) for Whale, a deep-water development in the US Gulf of Mexico (GoM) that features a 99% replicated hull and an 80% replication of the topsides from its 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,” says 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 GoM 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%. The Whale development will feature energy-efficient gas turbines and compression systems. This development will be the latest addition to Shell’s GoM portfolio where 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.