Shell to Redevelop Penguins Field in UK North Sea
Royal Dutch Shell plc confirmed Monday that it will redevelop the Penguins oil and gas field in the UK North Sea.
The project will see the construction of a floating production, storage and offloading (FPSO) vessel, the first new manned installation for Shell in the northern North Sea in almost 30 years. The FPSO is expected to have a peak production of around 45,000 barrels of oil equivalent per day, according to Shell.
The Penguins field currently processes oil and gas using four existing drill centres, which are tied back to the Brent Charlie platform. The redevelopment of the field, required when Brent Charlie ceases production, will see an additional eight wells drilled, which will be tied back to the new FPSO vessel. Natural gas will be exported through the tie-in of existing subsea facilities and additional pipeline infrastructure.
“Penguins demonstrates the importance of Shell’s North Sea assets to the company’s upstream portfolio,” Andy Brown, Shell’s upstream director, said in a company statement.
“It is another example of how we are unlocking development opportunities, with lower costs, in support of Shell’s transformation into a world class investment case,” he added.
Steve Phimister, Shell’s vice president for upstream in the UK and Ireland, said the company now plans to grow its North Sea production through its core output assets, after reshaping its portfolio over the last 12 months.
“In doing so, we will continue to work with the UK government, our partners and the regulator to maximize the economic recovery in one of Shell’s heartlands,” Phimister said in a Shell statement.
UK Business and Energy Secretary Greg Clark said Shell’s decision to further invest in the North Sea is a sign the industry recognises there are positive opportunities for further developments.
“The increase in confidence within the sector will boost jobs and growth across the UK in 2018,” Clark said in a statement sent to Rigzone.
"The oil and gas sector has the full support of the UK government, including through our ambitious Industrial Strategy,” he added.
In a statement published on social media site Twitter, the Oil & Gas Authority (OGA) said it was pleased to approve the redevelopment.
“We are expecting further high value projects to move forward to sanction this year, which will help prolong UK production for many years,” OGA Chief Executive Andy Samuel said.
We are very pleased to approve the redevelopment of Shell's Penquins cluster and expect more projects to move towards sanction in 2018. pic.twitter.com/zGHh9fF8nI— Oil & Gas Authority (@OGAuthority) 15 January 2018
Industry body Oil & Gas UK hailed the redevelopment confirmation as great news and an ‘exciting’ start to the new year.
“A global leader like Shell making a commitment on this scale demonstrates the investment potential the UK Continental Shelf still holds. It also shows the importance of the efficiency improvements our industry has delivered which have helped make redevelopment projects like this commercially attractive,” Deirdre Michie, chief executive of Oil & Gas UK, said in an organization statement.
“We are hopefully entering a more positive phase for our industry in the UK with new projects on the horizon that I hope will bring a much needed boost for companies in the supply chain,” Michie added.
The Penguins field lies within 541 feet of water, approximately 150 miles north east of the Shetland Islands. Discovered in 1974, the field was first developed in 2002 and is a joint venture between Shell (50 percent and operator) and ExxonMobil (50 percent).
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