After 14 years of exploration and development, Shell announces first oil in the deepest offshore facility in the world.

Shell Oil has produced its first oil and natural gas from the Perdido development, located about 250 miles (402 km) south of Houston in the ultra-deepwater sector of the Gulf of Mexico (GoM). The world’s deepest offshore drilling and production facility, Perdido sits in approximately 8,000 ft (2,450 m) of water, which is roughly equivalent to six Empire State buildings stacked one atop the other, and will access reservoirs deep beneath the ocean floor. The production spar and is 60 miles (97 km) beyond any existing developments in the GoM.

Marvin Odum, upstream Americas director, Shell Energy Resources Co., said the facility has opened new frontiers. “Perdido presented technical challenges unlike we’ve ever seen in the Gulf of Mexico,” he said. “Shell’s team used its expertise to open this new frontier and confront complex reservoir characteristics, extreme marine conditions, and record water-depth pressures.”

Perdido spar lying horizontal in the Gulf of Mexico. (Photo courtesy of Shell)

Dale Snyder, Perdido project manager, said the facility has presented unique problems, such as low-pressure reservoirs. He said all Perdido subsea fields will use a unique subsea separation and boosting system that separates oil and water at the sea floor rather than on the platform using electric submersible pumps to enable oil and natural gas recovery.

“This is a new frontier in many respects,” Odum said. “Perdido’s floating production facility can be expanded to serve the future potential in the area, and we can apply the technology and expertise utilized at Perdido to other similarly challenging environments in the future.”

Odum said the facility demonstrates what companies like Shell can do when US federal lands and waters are opened to responsible energy E&P. “We can demonstrate how we can do this without disrupting the environment,” he said.

From the first lease purchase in 1996 to today’s production, Perdido required an industry workforce of approximately 12,000 people, including employees and contractors. Shell designed and operates the Perdido host spar, a floating production facility, which is jointly owned by Shell (35%), Chevron (37.5%), and BP (27.5%).

Chevron is at the forefront of efforts to develop crude oil and natural gas from the Lower Tertiary. “Perdido represents the industry’s first production from the Lower Tertiary, where Chevron has made multiple discoveries and is a leading leaseholder,” said Gary Luquette, president, Chevron North America Exploration and Production Co. “This project’s success paves the way to develop further opportunities in this important new area.”

The facility will produce from the Great White, Silvertip, and Tobago offshore fields, requiring perhaps as many as 35 wells over the life of the fields. Tobago sits in more than 9,600 ft (2,900 m) of water and surpasses the world depth record for a completed subsea well. Currently, Great White field has five producing wells and one injector well.

Perdido will ramp up to annual peak production of more than 100,000 boe and 2 MMcf of gas per day. “One day of production can supply energy for 2 million households for a year,” Odum said. He added that the Great White field is expected to produce approximately 80% of Perdido’s total production.

Facts on Perdido include:
• One day’s production from Perdido is equivalent to the energy needed to fuel 500 cars for 15 years;
• First commercial production from the Lower Tertiary reservoir in the GoM;
• First GoM full host subsea separation and boosting removes about 2,000 psi of back pressure from the wells;
• First spar wet tree Direct Vertical Access (DVA) wells in water more than 1.2 miles (2 km) deep;
• The project achieved 10 million hours without a lost-time injury;
• Located 200 miles (320 km) from the Texas coast in Alaminos Canyon Block 857;
• The Great White field represents about 80% of Perdido’s total estimated production;
• Perdido’s project life is expected to be about 20 years;
• Construction of the Perdido host spar began in late 2006; and
• Topsides were mated with the spar in a single lift in early 2009.

Shell recently announced another GoM deepwater discovery at Appomattox, which is in addition to recent exploration success at West Boreas, Vito, and Stones. These discoveries underpin the potential for four new production hubs.