Olympus TLP sits in the foreground a mile away from Mars platform
Posted on 02/04/2014 11:07:03 AM PST by thackney
Royal Dutch Shell has started production from its Olympus platform in the deep waters of the Gulf of Mexico that could extend production at the Mars field through 2050, the company said Tuesday.
The Olympus platform, located in water 3,000 feet deep about 130 miles south of New Orleans, will eventually add up to 100,000 barrels of oil equivalent per day to production from the Mars field.
It’s the first major project Shell has launched in the Gulf since the partial federal drilling moratorium that lasted three months in 2010 after the worst oil spill in U.S. history, when BP’s Macondo well blew out. And the oil producer plans to follow the newly fired-up project with another later this year and a third in 2016.
The largest U.S. offshore region “is an important growth pipeline for Shell and our holdings in the Gulf play an important role in that – not only here but in other parts of the world,” said John Hollowell, executive vice president for deep water for the Shell Upstream Americas division.
In the past two years, the region has become more widely known for its attractive economics. It’s easier to make money there because deepwater wells in the Gulf can flow enormous amounts of oil through fewer wells than operators require in North American shale plays.
A wave of new projects are expected to come online in the Gulf over the next two years, potentially pushing the region’s daily oil production past its peak previous peak of 1.8 million barrels by 2016, Wood Mackenzie forecasts. The Gulf’s daily production could grow by 180,000 barrels to 1.55 million barrels this year, according to the Energy Information Administration.
Favorable oil prices continue to make the Gulf “an attractive place to invest money,” as well as a region where Shell can leverage its existing infrastructure to continue to add new production, Hollowell said.
The company did not disclose the current production rate of the Olympus platform or its construction costs. In 2013, production from the Mars field averaged 60,000 barrels of oil equivalent per day.
The field was discovered in 1989, along with the nearby Ursa prospect. Together, the Mars-Ursa field is the largest ever discovered in the Gulf of Mexico, with 1.3 billion barrels of recoverable reserves, according to Wood-Mackenzie. Production didn’t begin at the field until 1996.
Initially, Shell believed 770 million barrels of oil equivalent could be recovered from the Mars field, but the company said it has exceeded that total. With the addition of Olympus, Shell said it could expand production from Mars to 1.1 billion barrels of oil equivalent.
Olympus will produce from the Mars B region of the field. The project to develop Mars B was funded by Shell and BP. Shell holds a 71.5 percent interest in Mars B, with BP holding the remaining 28.5 percent.
Hollowell said in a written statement:
We safely completed construction and installation of the Olympus platform more than six months ahead of schedule, allowing us to begin production early from the development’s first well. Olympus is the latest, successful start-up of our strong portfolio of deep-water projects, which we expect to generate substantial value in the coming years. Deep water will continue to be a core growth opportunity for Shell.
Shell’s next project in the Gulf will fire up later this year 225 miles southwest of New Orleans at its Cardamom discovery, where the company will connects subsea wells to its Auger platform in more than 2,700 feet of water. The Auger was the first platform Shell ever launched into the Gulf, in 1994. The subsea wells in the Cardamom are expected to pump 50,000 barrels of oil equivalent per day at their peak.
The company expects to start producing oil in 2016 from its ultra-deepwater Stones field, about 200 miles southwest of New Orleans. That field was discovered in 2005 and sits in 9,500 feet of water. That project is expected to be the deepest-producing platform in the world, located in the Gulf’s largely uncharted lower tertiary region.
“That makes the project more complex — the water depth is significant,” Hollowell said. “But we have a track record of breaking through technological barriers. We’re excited about the new frontier that might develop after” it launches production in the Stones field.
Olympus TLP sits in the foreground a mile away from Mars platform
I like the term “production” when it comes to hydrocarbons.
Like.
Drill baby drill!
OK, teacher, I am ready for my lesson.
With all of that fancy stuff that you guys can now do
with multiple drilling and directional drilling and everything,
then how come it is that those rigs need to be so close together?
If you can pump 100,000 bbl a day at max capacity with one, then two will pump twice as much.
It isn’t like a small field where your pumping is limited by flow rate to the pool.
Thanks.
That makes sense.
I was thinking it had to do with the boundary lines for specific leases, or something like that.
The liberals will have their meltdown over this news, I’m sure.
The Mars field has been one of Shell’s most important fields over the last 15 years. When we discovered the field in 1989, we estimated the field to have nearly 700 million boe of resources. To date the field has produced over 770 million boe.
Mars B will enable production to reach an estimated 1.1 billion boe. The Olympus TLP, along with our subsea tie backs West Boreas and South Deimos, will prolong access to the prolific Mars oil and natural gas field until at least 2050. We aim to start production in around 2014 and the combined development has potential to deliver production rates in the order of ~100k boe/d.
We initially developed the field using the Mars A 24 well tension leg platform. Given the field’s sizeable resources, we identified the need for extra infrastructure to boost the ongoing development of the field. In September 2010, we decided to proceed with the commercial agreements and development plans for the Mars B Project.
http://www.shell.com/global/aboutshell/major-projects-2/mars-b.html
Real Answer:
Better minds on this subject than ours studied it greatly and justified spending a Billion or so dollars.
More details at:
YOU ——> ‘da man!
Thanks!
Wow! Good show, Shell!
What does “boe” mean?
"Barrels of Oil Equivalent".
It is a calculated equivalent barrels of oil, done usually by normalizing the thermal content of condensate and associated gas to the reservoir oil.
Unfortunately after reading this story Barack Hussein Obama remembered that he has a shiny new pen and he is now thinking about shutting it down. He doesn’t want his record of job destruction destroyed.
I fished near Perdido last Oct....
Those rigs are massive. What’s the hurricane plan? Give the anchor lines some slack and let her ride?
They are designed to shutdown, evacuate all personal, and ride out a hurricane. Sometimes the get damaged but usually start back up afterward without too much trouble.
Forgive my ignorance, but how are these fields parceled out? Is it a case of any oil company from around the world being able to test drill, or are there rules against foreign companies setting up shop?
Within 200 nautical miles from shore is a country’s exclusive economic zone. The resources there belong to that country. The federal government decides which areas they want to lease and put those up for auction.
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