Shell Invests In The Whale Development In The Gulf Of Mexico

Shell Offshore Inc., a subsidiary of Royal Dutch Shell plc, today announces the final investment decision (FID) for Whale, a deep-water development in the U.S. Gulf of Mexico that features a 99% replicated hull and an 80% replication of the topsides from our Vito project.

“Whale is the latest demonstration of our focus on simplification, replication and capital projects with shorter cycle times to drive greater value from our advantaged positions,” said Wael Sawan, Shell Upstream Director. “We are building on more than 40 years of deep-water expertise to deliver competitive projects that yield high-margin barrels so that we are able to meet the energy demands of today while generating the cash required to help fund the development of the energy of the future.”

Whale will be the second Shell-operated deep-water development in the Gulf of Mexico to employ a simplified, cost-efficient host design. With this development approach, Shell anticipates an internal rate of return estimated to be greater than 25%. Our Whale development will feature energy-efficient gas turbines and compression systems. This development will be the latest addition to our Gulf of Mexico portfolio where our production is among the lowest greenhouse gas (GHG) intensity in the world for producing oil.

The Whale development, owned by Shell Offshore Inc. (60% operator) and Chevron U.S.A. Inc. (40%), is expected to reach peak production of approximately 100,000 barrels of oil equivalent per day (boe/d) and currently has an estimated, recoverable resource volume of 490 million boe. Whale will be Shell’s 12th deep-water host in the Gulf of Mexico and is currently scheduled to begin production in 2024.

Shell’s Powering Progress strategy to thrive through the energy transition includes increasing investment in lower carbon energy solutions, while continuing to pursue the most energy-efficient and highest-return Upstream investments.

• The Whale production facility is in the Alaminos Canyon Block 773 and is adjacent to the Shell-operated Silvertip field, approximately 10 miles from the Shell-operated Perdido platform and approximately 200 miles southwest of Houston.
• Discovered in 2017, Whale will feature a semi-submersible production host in more than 8,600 feet of water with 15 oil producing wells.
• Whale’s design closely replicates Vito, a four-column semi-submersible host facility located in the greater Mars Corridor. Vito is scheduled to begin production in 2022.
• By leveraging the engineering, construction and supply chain of Vito, Whale is expected to achieve first oil 7.5 years after discovery.
• The cycle time includes the impact from COVID cash-preservation efforts that delayed project FID by one year.
• The estimated peak production and current estimated recoverable resources presented above are 100% total gross figures.
• The reference to our U.S. Gulf of Mexico production being among the lowest GHG intensity in the world is a comparison among other IOGP oil- and gas-producing members.
• Shell is the leading operator in the U.S. Gulf of Mexico.
• In addition to operations in Brazil and the U.S. Gulf of Mexico, Shell’s deep-water portfolio includes frontier exploration opportunities in Mexico, Suriname, Argentina and West Africa.