The floating production platform for Shell’s deep-water US Gulf of Mexico Vito project towers over the Kiewit Offshore Services yard in Ingleside, Texas, where it is undergoing final commissioning and prep work before it sails out to its permanent home on Mississippi Canyon Block 939.
The floating production unit may also loom large in Shell’s ongoing history in the US Gulf, with a simplified and replicable design that marks a significant step in the company’s ambition to make its offshore operations much more efficient.
Upon its sanction in 2018, Shell said the project had undergone a 70% reduction in cost from the original development plan, proposed in 2015, with a revised break-even price of less than $35 per barrel.
While Brent crude prices currently hover around $100 per barrel, they are unlikely to remain there, prompting Shell Vito project manager Kurt Shallenberger to note that the company “doesn’t design for a single [price] cycle”.
During an early April tour of the Vito four-column semi-submersible host facility, Shallenberger attributed the platform’s simplified design to the prolonged oil price slump of 2014-2016 that forced the entire upstream industry to rethink its business models.
“There was a big change in the oil price, and that caused us to reflect on the theme up to that point in the majors of making the impossible possible — Space Shuttle type stuff, big 50-year field lives for projects like Appomattox,” he said.
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“We started to see that’s not sustainable, something that big in an environment where the world is transitioning.
“So, there was a pause and we reframed Vito to something that we felt was simpler to build and simpler to operate. That makes it safer and more affordable.” With Vito, he added, the company is going from “Space Shuttle to Space X — something that’s repeatable, something that’s affordable”.
For comparison, Shell’s last deep-water US Gulf production platform —Appomattox, which came on stream in 2019 — tips the scales at about 66,000 tonnes, while Vito weighs in at a slim 22,000 tonnes, including all its components.
Keeping topsides to below 10,000 tonnes opened the project to multiple vendors capable of working within that size and weight range, Shallenberger said, while going larger and heavier would have limited the work to one or two companies with sufficient heavy-lift capacity.
Vito will be Shell’s eighth operated deep-water floating production platform in the US Gulf.
It is expected online in the fourth quarter of 2022 with a capacity of up to 100,000 barrels per day of oil fed through a subsea production system initially tied back to eight production wells, with deep in-well gas lift at 18,000 feet. According to Shallenberger, it could be two to three years before gas lift may be used to improve oil recovery in the reservoir, but the equipment systems needed for it have been installed on the platform.
Deck space has been reserved for additional future needs, including a potential waterflood project that would require space for another two modules of processing equipment.
The platform arrived onboard Boskalis’ heavy-transport vessel Mighty Servant 1 in late March at the end of a two-month-plus voyage from Sembcorp Marine’s Tuas Boulevard yard in Singapore.
In early summer, the Vito FPU is scheduled to depart Ingleside for its home in what the supermajor calls the Greater Mars Corridor, joining the company’s Mars, Ursa, Olympus and Appomattox FPUs and vast subsea network of tied-back wells and pipelines.
The Vito field spans four blocks — Mississippi Canyon 940, 941, 984 and 985 — with the host facility offset in Mississippi Canyon Block 939.
The platform will be moored in more than 4000 feet of water about 150 miles (240 kilometres) south-east of New Orleans.
Production will flow from a thick sub-salt Miocene sand reservoir up to the facility via eight jumpers about 70 to 110 feet long to a production manifold connected to the host facility via two 13,000-foot production flowlines and two 6000-foot steel catenary risers, according to field development plans filed with the US Bureau of Safety & Environmental Enforcement.
Shallenberger said it will “take less than 10 minutes for a hydrocarbon molecule to flow through the entire processing system”.
Arriving at the surface it will pass through the primary separator, where oil and gas are split like a “bottle of Italian salad dressing does when left undisturbed”, he said.
Shell has said Vito holds estimated recoverable resources of 300 million barrels of oil equivalent.
The field was discovered by Anadarko Petroleum in 2009 with a well drilled to 32,000 feet by the Noble deep-water drillship Amos Runner.
Shell took over as operator in September 2009 and extended the discovery six months later with a nearby appraisal well that found 600 feet of net pay at a depth of around 31,000 feet.
Shell operates the Vito project with a 63.11% stake with Norway’s Equinor on 36.89%.
Shell said in 2019 that the host facility for its Whale project in the deep-water US Gulf will be an 80% copy of the Vito platform.
The Whale field, discovered in 2018 in Alaminos Canyon Block 772, lies about 200 miles (320 kilometres) off the Texas coast in more than 8000 feet of water.
Shell reported at the time of discovery that it hit 1400 net feet of oil pay, calling it one of the largest discoveries in the US Gulf in the past decade.
The field development “features a 99% replicated hull and an 80% replication of the topsides” from the Vito project, the company has said.
One of the many benefits of using this “design one, build two” approach is that every challenge encountered in Vito’s construction is an opportunity for the Whale project to adapt and adjust.
Shallenberger said: “In the Vito-to-Whale replication journey, let’s say I have a quality issue on a piece of equipment built by a vendor.
“For every quality issue I discover, I can call ahead to the Whale team and let them know in advance so they can fix it before the item is built.
“Essentially, it’s a feedback loop that’s happening in real time.”
Whale is scheduled for first production in 2024. Shell operates the project with a 60% share, with partner Chevron on 40%.
|Shell-operated deep-water US Gulf floaters