Shell announces PowerNap expansion in the Gulf of Mexico

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Royal Dutch Shell said Thursday it will develop its “PowerNap” discovery in the Gulf of Mexico as an expansion from an existing deepwater platform.

Shell plans to bring the project online in 2021 to produce up to 35,000 barrels of oil equivalent today as the European energy major continues to grow as a top Gulf producer.

In order to bring project costs down and to avoid building many more multibillion-dollar platform projects, most of the developments moving forward in the Gulf are so-called tieback projects that connect newly drilled wells to existing facilities through underwater pipelines and umbilicals.

The new expansion will connect to Shell’s five-year-old Olympus platform in the Gulf.

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“PowerNap further strengthens Shell’s leading position in the Gulf of Mexico,” said Wael Sawan, Shell’s upstream director. “It demonstrates the depth of our portfolio of deepwater growth options, and our ability to fully leverage our existing infrastructure to unlock value.”

Shell said the PowerNap prospect was discovered in the Gulf in 2014 about 150 miles south of New Orleans. Shell aims for the expansion to be profitable with oil above $35 per barrel after bringing down the project costs, which are not being revealed.

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