Royal Dutch Shell PLC will install its first manned platform in the northern North Sea in almost 30 years with final investment decision to redevelop Penguins oil and gas field.
Penguins field lies in 165 m of water 150 miles northeast of the Shetland Islands. Discovered in 1974, the field was first developed in 2002 and is a 50% joint venture of operator Shell and ExxonMobil Corp. (OGJ Online, Sept. 4, 2001).
Shell’s investment decision authorizes construction of a floating production, storage, and offloading vessel that will replace the retiring Brent Charlie platform. Oil and gas is processed through four existing drill centers tied back to Brent Charlie. The operator selected the Sevan 400 FPSO as the development option for the field, which will add an additional eight wells.
Shell said its breakeven price on the redevelopment was below $40/bbl, and the FPSO is expected to have a peak production of about 45,000 boe/d. Oil will be transported via tanker to refineries and gas will be transported via the FLAGS pipeline to the St. Fergus gas terminal in northeast Scotland, Shell said.
Global engineering and construction company Fluor has been let the FPSO engineering, procurement, and construction contract. Sevan Marine ASA will provide the technology under license agreement for the circular FPSO and will provide technical support during the design phase of the project.
Wood Mackenzie Senior Research Analyst Fiona Legate said the Penguins expansion in early 2018 is a positive marker for the North Sea, ending “a cautious era during the downturn.” The Penguins redevelopment is expected to produce about 80 MMboe. “This is the largest FID since Culzean in August 2015,” Legate said (OGJ Online, July 21, 2017). WoodMac expects as many as 14 UK FIDs in 2018, and “Penguins is the second-largest by reserves,” Legate said.
Contact Tayvis Dunnahoe at [email protected].