Royal Dutch Shell announced that its subsidiary Shell Offshore will move ahead with the PowerNap deepwater field in the US Gulf of Mexico having reached a final investment decision (FID), as per the latest oil and gas industry news.

Located in the south-central Mississippi Canyon area, about 240km from New Orleans, the PowerNap deepwater field will be tied back to the Olympus production hub operated by Shell where it has a stake of 71.5%. Shell’s partner in the Olympus production hub is BP Exploration and Production, which holds the remaining stake of 28.5%. The Olympus project has been in production since 2014.

The PowerNap field was discovered by Shell in 2014. Contained in roughly 1,280m (4,200ft) of water, the PowerNap oil field is estimated to hold over 85 million barrels of oil equivalent recoverable resources. Targeted to be brought into production in late 2021, the PowerNap deepwater field is anticipated to deliver up to 35,000 barrels of oil equivalent per day (boe/d) at peak rates.

Shell expects the PowerNap deepwater project to have a forward-looking break-even price under $35 per barrel.

Commenting on the FID taken on the PowerNap deepwater field, Wael Sawan – Shell Upstream Director said: “PowerNap further strengthens Shell’s leading position in the Gulf of Mexico.

“It demonstrates the depth of our portfolio of Deep Water growth options, and our ability to fully leverage our existing infrastructure to unlock value.”

The oil production from the PowerNap deepwater project will be transported to the market from the Olympus production hub through the Mars pipeline, which is operated by Shell’s subsidiary Shell Pipeline. The Mars pipeline is jointly owned by Shell Midstream Partners (71.5%) and BP Midstream Partners (28.5%).

Shell is a major operator in the US Gulf of Mexico with operating stakes across nine production hubs while having a network of subsea infrastructure.

For more oil and gas industry news and updates on the PowerNap deepwater field, keep following Business News Today.

  Gulf of Mexico, Mississippi Canyon, New Orleans, Oil and gas industry news, Olympus production hub, Royal Dutch Shell, Shell Offshore, US Gulf of Mexico, USA, Wael Sawan