Shell returns to North Sea with Penguins field redevelopment

Royal Dutch Shell will breath new life into the North Sea’s oil and gas industry after it revealed a plan to redevelop its Penguins field – its first major work in the basin in six years.

The expansion of the Penguins oil field, located in the Northern reaches of the North Sea, will centre on the construction of a floating production, storage and offloading vessel (FPSO), the first manned installation by Shell in the region in nearly 30 years.

Around 45,000 barrels per day (bpd) will be extracted from the field at peak production rate, building on its current output of 135,000 bpd.

The rising price of oil is also set to give the oil major a boost in terms of profitability, with production costs standing at US$40 per barrel, while global market prices have floated upwards to the brink of $70 per barrel.

“Shell has had a strong presence in this part of the Northern North Sea for more than 40 years,” said Steve Phimister, the company’s president for upstream in the UK and Ireland.

“Having reshaped our portfolio over the last 12 months, we now plan to grow our North Sea production through our core production assets.”

Shell recently completed the sale of close to half of its North Sea assets to private equity firm Chrysaor, as part of a $30 billion divestment drive.

Royal Dutch Shell will breath new life into the North Sea’s oil and gas industry after it revealed a plan to redevelop its Penguins field – its first major work in the basin in six years.

The expansion of the Penguins oil field, located in the Northern reaches of the North Sea, will centre on the construction of a floating production, storage and offloading vessel (FPSO), the first manned installation by Shell in the region in nearly 30 years.

Around 45,000 barrels per day (bpd) will be extracted from the field at peak production rate, building on its current output of 135,000 bpd.

The rising price of oil is also set to give the oil major a boost in terms of profitability, with production costs standing at US$40 per barrel, while global market prices have floated upwards to the brink of $70 per barrel.

“Shell has had a strong presence in this part of the Northern North Sea for more than 40 years,” said Steve Phimister, the company’s president for upstream in the UK and Ireland.

“Having reshaped our portfolio over the last 12 months, we now plan to grow our North Sea production through our core production assets.”

Shell recently completed the sale of close to half of its North Sea assets to private equity firm Chrysaor, as part of a $30 billion divestment drive.

@RGNonline