Shell Offshore Inc. and MOEX North America LLC have each taken the final investment decision to execute phase one of the deepwater Kaikias project in the US Gulf of Mexico.

Kaikias has a competitive go-forward break-even price below $40/bbl, according to Shell.

The project will be developed in two phases. The first phase includes three wells tied back using a single flowline to the nearby Shell-operated Ursa production hub. The wells are designed to produce up to 40,000 boe/d. Phase one is expected to start production in 2019.

Discovered in August 2014, Kaikias is located in about 4,575 ft (1,395 m) of water in the Mars-Ursa basin about 130 mi (210 km) offshore Louisiana. It is estimated to contain more than 100 MMboe recoverable resources.

Shell, a subsidiary of Royal Dutch Shell plc, is the operator and has an 80% working interest. MOEX NA, a wholly owned subsidiary of Mitsui Oil Exploration Co. Ltd., has the remaining 20% working interest.

Andy Brown, upstream director of Royal Dutch Shell, said: “Kaikias is an example of a competitive and capital-efficient deepwater project using infrastructure already in place. The team has done a great job to reduce the total cost by around 50% by simplifying the design and using lessons learned from previous subsea developments.”

In addition, two other Shell-operated projects in the Gulf of Mexico are currently under construction or undergoing pre-production commissioning: Coulomb Phase 2 and Appomattox.

Source: Offshore Mag -