The FINANCIAL -- Shell Offshore Inc. (Shell), a subsidiary of Royal Dutch Shell plc, on April 24 announces the final investment decision for Vito, a deep-water development in the U.S. Gulf of Mexico with a forward-looking, break-even price estimated to be less than $35 per barrel.
This decision sets in motion the construction and fabrication of a new, simplified host design and subsea infrastructure.
Vito is expected to reach peak production of approximately 100,000 barrels of oil equivalent (boe) per day, which represents a significant contribution to our continued growth in the Gulf of Mexico. The development currently has an estimated, recoverable resource of 300 million boe, according to Shell.
“With a lower-cost developmental approach, the Vito project is a very competitive and attractive opportunity industry-wide,” said Andy Brown, Shell Upstream Director. “Our ability to advance this world-class resource is a testament to the skill and ingenuity of our development, engineering and drilling teams.”
In 2015, Shell began to redesign the Vito project, reducing cost estimates by more than 70% from the original concept. Vito’s cost savings are due to the simplified design, in addition to working collaboratively with vendors in a variety of areas including well design and completions, subsea, contracting, and topsides design.
The Vito development is owned by Shell Offshore Inc. (63.11% operator) and Statoil USA E&P Inc. (36.89%); the field is located beneath more than 4,000 feet of water, approximately 150-miles southeast of New Orleans.
With 40-years of Shell leadership in deep water, Vito will be Shell’s 11th deep-water host in the Gulf of Mexico and is currently scheduled to begin producing oil in 2021. With global production progressing to more than 900,000 boe per day, Shell has deep-water projects and opportunities in the U.S., Brazil, Nigeria, Malaysia, and Mexico.