Royal Dutch Shell announced this morning that it had made a final investment decision and is moving forward to open up new oil developments in the deep waters of the U.S. Gulf of Mexico, United Press International reports.
Shell plans to build what it says will be the largest floating platform in the Gulf of Mexico to tap into the deepwater Appomattox prospect. Average production is expected to be about 175,000 barrels of oil equivalent per day.
“Appomattox opens up more production growth for us in the Gulf of Mexico, where our production last year averaged about 225,000 BOE per day, and this development will be profitable for decades to come,” Upstream Director Marvin Odum says in a statement. “With its competitive cost and design, Appomattox is next in our series of deep-water successes.”
Shell is moving forward with the investment decision at a time when its industry peers are trimming expenses in order to cope with a weak market for crude oil. Low crude oil prices means less spending for oil and gas exploration, though Shell says it should break even at Appomattox with Brent crude oil priced at around $55 per barrel, about 12% less than the price this morning.
Shell’s investment decision also comes one day after it received a federal permit for drilling operations in the arctic waters off the coast of Alaska, but with important restrictions.
Shell holds a majority stake in the Appomattox project, which also includes Chinese investors.
