In Focus: Replication and standardisation
Shell has long been recognised as a pioneer in the deep-water oil and gas industry, with more than 40 years' experience of designing, building and operating some of the world’s best offshore facilities. However, as the industry has matured, Shell has adjusted to a new reality where bigger is not necessarily better. Viewing cost – and everything that influences it – in a different way is essential to future success. Therefore, the next generation of our deep-water projects focuses not only on the technically possible, but also on what is profitable for the long term.
The Vito field was discovered in the US Gulf of Mexico in 2009. Scheduled to come online in 2021, it will be our 11th deep-water host project to be engineered and delivered for the US Gulf of Mexico. By leveraging knowledge from our own history and that of the broader industry, we rescoped and simplified the project, reducing costs by more than 70%.
A simplified hull design reduces both risk and operating expenses since it requires less maintenance. The simplified mooring design requires less equipment, less capital and enhances safety. By limiting the topsides weight, we can execute a single construction lift to reduce complexity. Through collaboration with vendors, we developed new outcome-based contracts to promote mutually beneficial results.
The success of an industry-standard design for Vito paves the way for other deep-water projects to continue to innovate safe, lower-cost developments that are expected to be resilient across commodity price cycles. Shell’s next major project in the US Gulf of Mexico is Whale. By fully leveraging the capabilities of our Projects & Technology organisation in areas such as best-in-class well delivery and competitive scoping, we are driving towards industry top quartile development costs and cycle time for the project. We are targeting less than six years from discovery to first oil, with plans to replicate as much as 80% of the Vito host design. Whale is pushing us to find even more ways to be efficient – redefining our project stage gates, working better with co-owners to share learnings, and focusing on simplicity to make designs safer to operate.
Vito and Whale are just two examples of how we are building on our pioneering legacy in the US Gulf of Mexico to produce competitive facilities that will contribute strong cash generation from the Deep Water business through the coming decades.