Shell Offshore, Inc. (Shell), a subsidiary of Royal Dutch Shell, has started production – around one-year ahead of schedule – at the first phase of Kaikias, a subsea development in the US Gulf of Mexico.
According to Shell’s statement on Thursday, the project’s estimated peak production is 40,000 barrels of oil equivalent per day (boe/d).
Shell noted it has reduced costs by around 30% at this deep-water project since taking the investment decision in early 2017, lowering the forward-looking, break-even price to less than $30 per barrel of oil.
“We believe Kaikias is the most competitive subsea development in the Gulf of Mexico and a prime example of the deep-water opportunities we’re able to advance with our technical expertise and capital discipline,” said Andy Brown , Upstream Director, Royal Dutch Shell.
“In addition to accelerating production for Kaikias, we reduced costs with a simplified well design and the incorporation of existing subsea and processing equipment.”
Kaikias is located in the prolific Mars-Ursa basin around 130 miles (210 kilometers) from the Louisiana coast and is owned by Shell (80% working interest), as operator, and MOEX North America LLC (20% working interest), a wholly owned subsidiary of Mitsui Oil Exploration Co., Ltd.