Shell's Oregano Field Producing 11,000 bopd

Continuing the successful expansion of its hub infrastructure strategy, Shell Exploration & Production Company announces that its 100 percent-owned Oregano field is currently producing 11-thousand barrels of oil per day from two wells through a subsea production system. Oregano is located on Garden Banks Block 559 in the Gulf of Mexico. Production began October 17th, one month ahead of schedule and only 14 months after project sanction.

Located about 225 miles southwest of New Orleans in approximately 3,400 feet of water, Oregano ties back eight miles, via a subsea manifold, to Shell's Auger tension-leg platform and is that hub's second subsea development. Macaroni, which began production in 1999, was the first subsea tie-in to Auger. For transportation from the subsea manifold to Auger, Oregano will utilize a single production flowline, as opposed to the traditional two-flowline loop.

"The rapid start up of the Oregano project illustrates Shell's proven operational capabilities in developing subsea tiebacks," said Steve Sears, Subsea Development Manager. "Additionally, our experience in the development and installation of these subsea projects allows us to continually reduce our costs. Oregano, for instance, is forecast to come in about $10 million under budget, a significant cost savings for this project."

Development costs for Oregano are approximately $120 million, excluding lease costs. Total gross ultimate recovery is estimated at 50 million barrels of oil equivalent. Peak production of 20 thousand barrels of oil per day is expected to occur by year's end.