Shell, the world’s second-largest publicly traded energy company, is making a high-stakes bet that it can take highly efficient technology and processes perfected onshore and deploy it in deep-sea production,The Wall Street Journal reports.
On a hulking steel behemoth 130 miles southeast of New Orleans, more than 170 roughnecks and engineers are working to quickly wring more oil out of a massive old field—and keep it profitable even if oil sinks to $15 a barrel.
The company hopes to squeeze more oil out of the existing undersea wells, like those that ring the platform, which weighs 82 million pounds and floats in 3,000 feet of water over the Mars oil field in the Gulf of Mexico.
Shell also wants to make new deepwater projects cheaper and faster, especially in Brazil, where it acquired a bevy of offshore prospects as part of its $50 billion purchase of BG Group PLC last year. It is a strategy born of necessity, the publication says.
Big oil companies have traditionally needed prices of $70 a barrel or more just to break even on new deepwater projects, which take years to begin paying off. But with onshore shale oil flooding the market, Shell executives aren’t sure when crude, currently around $50 a barrel, will fetch more again.
