From Houston (BN): Shell has begun FEED on its Vito (SEN, 31/1) deepwater development in the Gulf of Mexico.

The project, with production to peak at 100,000boe/d, will be a floating production system - a semi, spar or tension leg platform all remain under consideration - capable of receiving up to four subsea tiebacks. Anadarko drilled the original discovery well in Mississippi Canyon 984 in 1,235m in 2009 about 200km southeast of New Orleans. It later transferred the operatorship to Shell.

It is now part of a four-block unit and owned by Shell (51.33%) Statoil (30%) and Freeport-McMoRan (18.67%). The lease was acquired in 2001 by Shell and Spinnaker.

SEN understands that the decision on the floater type will be made once FEED has identified the preferred method of providing pressure support. Conventional water injection is not considerate appropriate in this type of reservoir and there has been some talk about a the use of a low salinity solution. BP has been a leading proponent of LoSal technology for water injection.

Coulomb go-ahead

Shell has also given the official go-ahead for its Coulomb phase 2 (31/19) project in 2,300m in Mississippi Canyon 657.

Two wells will be drilled - one this year and one in 2016 - which wll be tied into an existing subsea infrastructrure and then back to the Na Kika semi-submersible production unit, 36km to the northwest. The project is expected to produce 20,000boe/d at peak.

The plan calls for a new manifold, trees, jumpers and umbilical links. Shell has held this lease outright since the previous price-collapse year of 1986, when it paid the then considerable sum of $1.3mn for it.

Shell executives have also said that they want to back to the Arctic this year. In comments made in its Q4 earnings call that struck many as wildly inconsistent with the low-oil-price, cost-cutting environment companies now find themselves in, Shell CEO Ben van Beurden and CFO Simon Henry said they want to spend $1bn exploring in the area that handed Shell a disastrous setback in 2013.

The management pair said, however, that there are lot of ‘ifs’ and they still need to get the permits and not run into any more legal roadblocks to proceed. And, of course, they said whether they go beyond exploration depends on what they find. Both said a 500mmbbl find won’t be sufficient for development to be economic. A discovery must be in ‘the billions’.

Offshore