Shell revealed today that it had taken a final investment decision (FID) on the redevelopment of the Penguins area in the UK North Sea.
The decision paves the way for the construction of Shell’s first new manned installation in the northern North Sea in more than 30 years.
The new floating production, storage and offloading (FPSO) vessel is expected to have a peak production of about 45,000 barrels of oil equivalent per day.
Shell confirmed US firm Fluor had been awarded the construction contract for the vessel.
Steve Phimister, Shell’s vice president for upstream in the UK and Ireland, said: “Shell has had a strong presence in this part of the northern North Sea for more than forty years.
“Having reshaped our portfolio over the last twelve months, we now plan to grow our North Sea production through our core production assets.
“In doing so, we will continue to work with the UK government, our partners and the regulator to maximise the economic recovery in one of Shell’s heartlands.”
It comes after chief executive Ben van Beurden told Energy Voice that Shell was in no way making a North Sea retreat.
Speaking exclusively to Energy Voice from his Hague office, he said: “The North Sea has improved tremendously. It’s one thing to say, look at what Shell’s selling.
“That’s one part of the story, but let’s first of all see what we have done with the asset base, including the asset base we kept.” Read more of his interview here.
In 2017, Shell struck a $3.8billion deal with Chrysaor for a package of its assets, including Buzzard, Beryl, Bressay, Elgin-Franklin, J-Block, the Greater Armada cluster, Everest, Lomond and Erskine, and a 10% stake in Schiehallion.
Mr van Beurden said the firm had held onto its “top tier” North Sea portfolio, including the Penguins cluster.
The cluster was discovered in 1974 is is located 150miles north-east of Shetland.
The area started production in 2003 via a subsea tieback to Brent Charlie; however, it was not designed at the time for future redevelopment.
This new plan comes after years of trying to crack the geological puzzle surrounding the Penguins cluster.
The new FPSO will replace the current 40mile tie-back of Penguins’ five deposits to aging Brent Charlie platform.
Eight new wells will be tied back to the vessel, which will be a Sevan 400 model, cylindrical in design.
Shell owns a 50% stake in the Penguins project, while ExxonMobil has the other 50%.
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