Shell revives Penguins field production in UK North Sea with new floating production facility

Shell has restarted Penguins field production in the UK North Sea, marking a major step forward for the country’s offshore energy sector. The redevelopment of this critical North Sea oil field comes with the deployment of a floating production facility, designed to improve efficiency and reduce emissions.

The project restores production at the field, which previously relied on the now-decommissioned Brent Charlie platform. With an estimated peak output of 45,000 barrels of oil equivalent per day (boe/d) and recoverable resources of approximately 100 million barrels of oil equivalent (boe), the Penguins field is expected to play a vital role in strengthening the UK’s domestic energy supply.

Beyond oil production, the field will generate enough natural gas to heat 700,000 UK homes annually, ensuring a stable supply amid ongoing concerns over the country’s reliance on imported energy. The new floating production facility boasts an operational emissions profile that is 30% lower than that of Brent Charlie, reflecting Shell’s commitment to a more sustainable future in offshore production.

Why is Shell investing in the redevelopment of the Penguins field?

As part of its broader strategy to maintain North Sea oil production while lowering its carbon footprint, Shell has prioritised efficient offshore projects with long-term value. The Penguins field production restart comes at a time when UK oil and gas output has been declining. According to the North Sea Transition Authority (NSTA), domestic production dropped by 11% in the past year, further widening the gap between supply and demand.

Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director, highlighted the significance of the project, stating that the Penguins field production supports the UK’s energy security by providing a stable, domestic source of oil and gas. She also noted that the investment in floating production facility technology aligns with Shell’s strategy to deliver more value with fewer emissions.

While oil from the field will be transported by tanker to refineries outside the UK, some of these refineries supply finished products like petrol and diesel back to the domestic market. Meanwhile, the natural gas will be delivered via pipeline to the St Fergus gas terminal in northeast Scotland, where it will enter the UK’s national gas grid.

What makes the Penguins floating production facility different from previous platforms?

The floating production facility installed at the Penguins field is Shell’s first new UK North Sea-operated platform in over 20 years. Developed by Norway-based Sevan, the unit features a cylindrical hull design, which enhances stability and efficiency in rough offshore conditions. Unlike older platforms, it also incorporates a flareless system, which captures and recycles vapour emissions rather than releasing them into the atmosphere.

The project has involved drilling multiple new wells, which are connected to the FPSO via subsea tiebacks. Located in 165 metres (541 feet) of water, about 150 miles northeast of the Shetland Islands, the field was first discovered in 1974. It originally produced North Sea oil between 2003 and 2021 before being put on hold after the Brent Charlie platform shut down.

How does this project fit into Shell’s wider energy strategy?

Shell’s investment in Penguins field production is part of a broader plan to sustain offshore energy production while advancing its long-term emissions reduction goals. At its 2023 Capital Markets Day, the company reaffirmed its target of bringing over 500,000 boe/d of new upstream and integrated gas projects online between 2023 and 2025. The Penguins field is expected to contribute significantly to this commitment.

The project also comes amid a major restructuring of Shell’s North Sea oil operations. In December 2024, Shell announced a joint venture with Equinor UK Ltd to consolidate their UK offshore assets. Once the deal closes, the new entity—jointly owned by Equinor and Shell at 50% each—will become the UK North Sea’s largest independent producer. This transition highlights a shift toward strategic partnerships aimed at maximising efficiency in a maturing basin.

What environmental measures are in place at the Penguins FPSO?

As pressure mounts on oil companies to reduce emissions, the Penguins floating production facility incorporates several advanced technologies to lower its environmental impact. The FPSO’s gas compression turbines use dry low-emission (DLE) combustion technology, cutting down emissions of nitrogen oxide (NOx), sulphur oxide (SOx), carbon monoxide (CO), and unburned hydrocarbons.

Additionally, a Vapour Recovery Unit (VRU) captures gas that would typically be flared, redirecting it into the system for reuse. This approach significantly reduces routine emissions and aligns with Shell’s broader net-zero emissions strategy.

By the end of 2023, Shell had already achieved 60% of its goal to halve operational emissions (Scopes 1 and 2) by 2030 compared to 2016 levels. The Penguins field production redevelopment plays a key role in maintaining production while progressing toward this long-term sustainability target.

What does the future hold for Shell’s North Sea operations?

The successful restart of Penguins field production underlines Shell’s commitment to maintaining a stable supply of North Sea oil while integrating cleaner technologies. However, the long-term sustainability of UK offshore production will depend on continued investments in lower-carbon energy solutions and industry-wide collaboration on emissions reduction.

As Shell transitions to a new operating structure with Equinor, it remains to be seen how this shift will influence its North Sea oil portfolio. Nonetheless, projects like Penguins demonstrate that offshore production still has a role to play in the UK’s energy landscape—particularly as the country seeks to balance energy security with sustainability.