Shell to redevelop Penguins field in the North Sea
The redevelopment of the field will see the construction of a floating production, storage and offloading vessel.
Royal Dutch Shell is to begin drilling in the North Sea’s Penguins oil and gas field in the firm’s first manned project in the upper end of the region for almost 30 years.
The energy giant said that the redevelopment of the field will see the construction of a floating production, storage and offloading vessel.
Describing the plan as an “attractive opportunity”, Shell said it is expected to have a peak production of around 45,000 barrels of oil per day.
Discovered in 1974, the field was first developed in 2002 and is a 50% joint venture between Shell and ExxonMobil.
Andy Brown, Shell’s upstream director, said: “Penguins demonstrates the importance of Shell’s North Sea assets to the company’s upstream portfolio.
“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.”
The Penguins field currently processes oil and gas using four existing drill centres and its redevelopment will see an additional eight wells drilled.
Natural gas will be exported through the tie-in of “existing subsea facilities” and additional pipeline infrastructure, Shell added.
The Penguins field is in 165 metres (541 feet) of water and located 150 miles north east of the Shetland Islands.
The news comes amid a resurgence in oil prices, which has seen Brent touch $70 a barrel.
Shell last year announced it had completed the sale of a package of North Sea assets for up to 3.8 billion US dollars (£3 billion) to smaller rival Chrysaor.
Steve Phimister, Shell’s vice president for upstream in the UK and Ireland, said: “Shell has had a strong presence in this part of the northern North Sea for more than forty years.
“Having reshaped our portfolio over the last twelve months, we now plan to grow our North Sea production through our core production assets.
“In doing so, we will continue to work with the UK government, our partners and the regulator to maximise the economic recovery in one of Shell’s heartlands.”