Shell Announces Development of Two More Deepwater Discoveries

Shell Exploration & Production Company (SEPCo) announced today the development of its Oregano and Serrano discoveries located in the Gulf of Mexico in 3,400 feet of water. A subsea production system, tied back to Shell's Auger tension leg platform (TLP) in 2,860 feet of water, will be used to develop the two discoveries. Oregano and Serrano are located more than 220 miles southwest of New Orleans in the Garden Banks area, blocks 559 and 516, respectively.

Both developments are 100 percent owned by SEPCo and will be the 14th and 15th, deepwater projects to be operated by SEPCo in the Gulf of Mexico, the largest number of any company. Each development is estimated to recover about 50 million barrels of oil equivalent (BOE), for a total of 100 million BOE. Reserves at Serrano are primarily gas, while Oregano's reserves are primarily oil.

"Serrano and Oregano will contribute to Shell's continued leadership in deepwater Gulf of Mexico production. In addition, these development projects advance exciting areas of new technology to significantly reduce costs and enhance flow assurance," said Dave Lawrence, SEPCo's vice president of Exploration and Development.

Total development costs for the two projects are estimated to be approximately $250 million, excluding lease costs. Production is scheduled to begin at Serrano in September 2001, with Oregano startup scheduled for December 2001. Peak daily production rates are expected to reach 150 million cubic feet of gas and 20,000 barrels of oil, respectively.

Although Serrano and Oregano are separate fields, the development activities are being executed through a single integrated plan. At each field, Shell plans to initially complete two wells, set a flowline sled, and install a single 6-inch by 10-inch pipe-in-pipe insulated flowline which will tie back to Shell's Auger TLP.

Fact sheets, maps and a schematic can be found at: