Shell Takes FID on Kaikias in US Gulf

Shell and Japan's Mitsui Oil have each taken the final investment decision to execute phase one of the Kaikias deep-water project in the US Gulf of Mexico, saying it has a competitive breakeven price below $40/b. It will produce oil and gas through a subsea tie-back to the nearby Shell-operated Ursa production hub.

“Kaikias is an example of a competitive and capital efficient deep-water project using infrastructure already in place,” said Andy Brown, Shell upstream chief who said its team had "done a great job to reduce the total cost by around 50% by simplifying the design" and learning prior subsea lessons.

Andy Brown, Shell's upstream chief (Photo credit: Shell)

The project will be developed in two phases with phase one expected to start production in 2019. The first phase of development includes three wells which are designed to produce up to 40,000 barrels of oil equivalent per day (boe/d) at peak rates. 

Kaikias is located in the prolific Mars-Ursa basin approximately 210 kilometres (130 miles) from the Louisiana coast and is estimated to contain more than 100mn boe of recoverable resources. Shell is operator with 80%, while Mitsui has the other 20%.

Mark Smedley