Royal Dutch Shell plc now estimates that the development potential of its Kaikias discovery in the deepwater Gulf of Mexico could exceed over 100 million barrels of oil equivalent.
Discovered in 2014, Shell completed the appraisal of its wholly-owned Kaikias discovery in August of this year. Appraisal drilling revealed over 300 feet of net oil pay, Shell said in a statement. Full evaluation of the well results continues. Shell used Noble Drilling’s Noble Globetrotter I (UDW drillship) for exploration and development drilling.
Located approximately 60 miles offshore Louisiana in 4,575 feet of water, Kaikias is situated near Shell’s existing deepwater Gulf infrastructure, and builds upon the company’s exploration and leadership position in the Mars-Ursa Basin, the company said in a statement.
“Near field infrastructure to the Kaikias well presents opportunities for cost efficiencies – potentially reducing the overall development cost.”
Shell was able to complete Kaikias’ drilling and appraisal ahead of schedule and under budget, allowing Shell to achieve cost savings of over 20 percent.
“This achievement was reached despite the company drilling the longest well ever drilled by Shell at 34,500 feet measured depth,” Shell said.
Noting that the discovery could be tied back to one of several nearby platforms, including Mars, Mars B and Ursa, analysts with Tudor, Pickering and Holt say that Shell may press ahead with the development of Kaikias, a high value oily discovery.
“Early engineering is taking place and we would expect that FID [final investment decision] could be taken in 2016, given that Shell plans to aware some long-lead items next year,” the analysts said in a Nov. 19 note, adding that they expect low development capital expenditures associated with drilling, completion and tie-in costs for the wells.
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