Shell celebrates 40 years of deep-water innovation

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Oct 15, 2018, 09:00 ET

NEW ORLEANS, Oct. 15, 2018 /PRNewswire/ -- Shell Offshore Inc. (Shell), a subsidiary of Royal Dutch Shell plc, today marks 40 years since it pioneered the modern deep-water era, celebrating a legacy of innovation that continues as part of the company's growth strategy.

Shell currently has deep-water projects and exploration opportunities in the U.S., Brazil, Nigeria, Malaysia, Mexico, Mauritania, and in the Western Black Sea. That global presence began with a 1970s prospect, 105 miles southeast of New Orleans in the Gulf of Mexico.

Shell marks 40 years in deep water and the Gulf of Mexico is where it all started. In 1978, Shell installed the Cognac platform in the Gulf of Mexico, representing the beginning of modern day deep-water operations. Watch the pioneers of the Gulf of Mexico.

Shell's venture into the deep-water Gulf of Mexico all started with Cognac. Since then, the company's deep-water journey has been one of technological advances, innovation and going to depths no one ever thought possible.

The Perdido platform is one of Shell’s six deep-water, production hubs in the Gulf of Mexico, where 40 years ago, the company pioneered the modern, deep-water era.

"This is a special anniversary that we proudly celebrate with those who helped us drive that pioneering spirit – from the expertise of our employees and service providers to the support of the communities along the Gulf Coast," said Rick Tallant, Vice President, Production, Deep Water Gulf of Mexico. "It's an honor to be part of that legacy. What happened at Cognac in 1978 set Shell up for success in deep-water in the decades to follow."

In 1978, Shell brought the Cognac oil and gas field into production in 1,025 feet of water. Cognac was deeper than any previous offshore discovery and marked the first time that an energy company pushed the frontiers of deep water beyond the 1,000-foot water depth. To develop this field, the company designed and built the world's tallest and heaviest drilling and production platform.

When Shell acquired Cognac in a lease sale, the prospect was far beyond the depths common for the industry at that time. A vessel to drill in more than 1,000 feet of water did not yet exist. Shell translated teamwork and innovation into history-making accomplishments. After Cognac, the American Society of Civil Engineers presented Shell with the Outstanding Civil Engineering Achievement, the first ever awarded to an energy company. By 1982, Cognac was producing 72,000 barrels of oil equivalent (boe) per day.

Shell continued to lead the deep-water industry with more record-breaking, pioneering efforts. From Auger, the world's first tension leg platform, to Stones, the world's deepest offshore oil and gas project, Shell's team in the Gulf of Mexico has consistently found ways to make the seemingly impossible, become possible.

"This remains a heartland for US energy production," noted Tallant. "Our operations here in the Gulf of Mexico account for more than 50% of Shell's oil and gas production in this country."

Across four decades and around the world, deep water has become the growth priority for Shell's Upstream business with production on track to reach more than 900,000 boe/d by 2020 from already discovered, established reservoirs. Shell designs and operates its deep-water projects to be competitive and, since 2014, has reduced its unit development costs (UDC) and unit operating costs (UOC) by about 45%.

Editor's Notes:

Some of Shell's history of record-breaking achievements in the Gulf of Mexico include:

Auger is the world's first tension leg platform (TLP) that had both a permanent drilling rig and full-fledged production facilities. It was installed in the Gulf of Mexico in 1994 at a then world water depth record of 2,860 feet.
Perdido is the world's deepest spar, with a production start-up in 2010. It is moored in around 8,000 feet of water in the Gulf of Mexico.
The Mensa field, located 140 miles southeast of New Orleans, broke the record for the world's longest subsea tieback at 68 miles.
Stones is the world's deepest oil and gas project, operating in about 9,500 feet of water.

Shell continues to be a leading operator in the Gulf of Mexico, with eight production hubs and a network of subsea infrastructure. We are one of the largest leaseholders in the Gulf with access to some of the most prolific acreage.
Shell has a strong development pipeline in the Gulf of Mexico. In April, Shell announced it had taken a final investment decision for the Vito development which was redesigned to reduce costs and competitively develop the opportunity.
The Appomattox production hub is secure on its location in the Gulf of Mexico, with production planned for 2019.
In January, Shell announced one of its largest Gulf of Mexico exploration finds in the past decade with Whale, located approximately 200 miles southwest of Houston.
In May, Shell announced a large, deep-water exploration discovery with the Dover well. It is located approximately 13 miles from the Appomattox host.
Shell's enduring presence in the state of Louisiana began over a century ago and encompasses nearly every aspect of our business. This includes oil and gas exploration and production, pipeline supply and distribution, refining, chemicals and LNG for transport.
Over the past two years, Shell has contributed $13.8 million in social investment to Louisiana.

Cautionary Note

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SOURCE Shell