Shell greenlights cost-reduced deep-water Vito development in the Gulf of Mexico; breakeven at price < $35/barrel
Shell Offshore Inc., a subsidiary of Royal Dutch Shell plc, made its final investment decision for Vito, a deep-water development in the US Gulf of Mexico with a forward-looking, break-even price estimated to be less than $35 per barrel. This decision sets in motion the construction and fabrication of a new, simplified host design and 2subsea infrastructure.
In 2015, Shell began to redesign the Vito project, reducing cost estimates by more than 70% from the original concept. Vito’s cost savings are due to the simplified design, in addition to working collaboratively with vendors in a variety of areas including well design and completions, subsea, contracting, and topsides design.
Vito, discovered in 2009, will be Shell’s 11th deep-water host in the Gulf of Mexico. The Vito development is owned by Shell Offshore Inc. (63.11% operator) and Statoil USA E&P Inc. (36.89%). Located beneath more than 4,000 feet (1,219 meters) of water, approximately 150 miles (241 km) southeast of New Orleans, the field is expected to begin production in 2021.
Located over four blocks in the Mississippi Canyon area of the Gulf of Mexico, the Vito development will consist of eight subsea wells with deep (18,000 feet) in-well gas lift.
Shell expects Vito to reach peak production of approximately 100,000 barrels of oil equivalent (boe) per day. The development currently has an estimated, recoverable resource of 300 million boe.
With a lower-cost developmental approach, the Vito project is a very competitive and attractive opportunity industry-wide. Our ability to advance this world-class resource is a testament to the skill and ingenuity of our development, engineering and drilling teams.—Andy Brown, Shell Upstream Director
The Vito development is owned by Shell Offshore Inc. (63.11% operator) and Statoil USA E&P Inc. (36.89%).
With global production progressing to more than 900,000 boe per day, Shell has deep-water projects and opportunities in the US, Brazil, Nigeria, Malaysia, and Mexico.