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Released August 19, 2024 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Shell plc (NYSE:SHEL) (London, England) recently made a final investment decision (FID) on a technique it said could help extract more oil from its Vito project in the U.S. territorial waters of the Gulf of Mexico.
Shell Offshore Incorporated is the operator at Vito, alongside Norwegian energy company Equinor (NYSE:EQNR) (Stavanger, Norway) with its 36.89% stake in the project. First oil was achieved in February 2023 at an asset that Shell believes holds 29 million barrels of oil equivalent (BOE) reserves.
On Wednesday, Shell said it made an FID on waterflooding the Vito asset, a process that involves water injection to facilitate oil recovery.
"Waterflood is a method of secondary recovery where the injected water physically sweeps the displaced oil to adjacent production wells, while re-pressurizing the reservoir," the company said.
Shell believes waterflooding will more than double the reserve potential at Vito to about 60 million BOE. Vito started production last year at about 100,000 BOE per day (Boe/d). The process is expected to begin in 2027. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can learn more from a detailed project report.
"Over time, we've seen the benefits of waterflood as we look to fill our hubs in the Gulf of Mexico," said Zoë Yujnovich, the upstream and integrated gas director for Shell.
Shell saw an overall production decline during the second quarter, which it said was the result of a busy maintenance schedule. The company nevertheless aims to deliver more than 500,000 Boe/d by 2025.
Total U.S. crude oil production is setting records, reaching 13 million barrels per day (BBL/d) recently. On average, the Gulf of Mexico accounts for about 15% of total oil output. During the second quarter, federal data show an estimated total U.S. output of 1.8 million BBL/d, a level that's expected to hold through 2025.
Gulf production has grown steadily since the 1980s, with output increasing about 150% since then. Barring the five-year period after the Deepwater Horizon tragedy in 2010, offshore production has shown incremental, but steady, gains.
Oil from the Gulf of Mexico is considered low-carbon relative to other basins. Shell designed the four-column semi-submersible rig for Vito with emissions in mind, saying the design was simplified and rescoped to cut about 80% of the expected carbon dioxide emissions over its lifespan.
"This investment will deliver additional high-margin, lower-carbon barrels from our advantaged upstream business, while maximizing our potential from Vito," Yujnovich added.
Shell recorded a $6.3 billion profit during the second quarter, a 19% decline from the three-month period ending in March. The drop was attributed to lower refining margins and weaker commodity prices.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Shell Offshore Incorporated is the operator at Vito, alongside Norwegian energy company Equinor (NYSE:EQNR) (Stavanger, Norway) with its 36.89% stake in the project. First oil was achieved in February 2023 at an asset that Shell believes holds 29 million barrels of oil equivalent (BOE) reserves.
On Wednesday, Shell said it made an FID on waterflooding the Vito asset, a process that involves water injection to facilitate oil recovery.
"Waterflood is a method of secondary recovery where the injected water physically sweeps the displaced oil to adjacent production wells, while re-pressurizing the reservoir," the company said.
Shell believes waterflooding will more than double the reserve potential at Vito to about 60 million BOE. Vito started production last year at about 100,000 BOE per day (Boe/d). The process is expected to begin in 2027. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can learn more from a detailed project report.
"Over time, we've seen the benefits of waterflood as we look to fill our hubs in the Gulf of Mexico," said Zoë Yujnovich, the upstream and integrated gas director for Shell.
Shell saw an overall production decline during the second quarter, which it said was the result of a busy maintenance schedule. The company nevertheless aims to deliver more than 500,000 Boe/d by 2025.
Total U.S. crude oil production is setting records, reaching 13 million barrels per day (BBL/d) recently. On average, the Gulf of Mexico accounts for about 15% of total oil output. During the second quarter, federal data show an estimated total U.S. output of 1.8 million BBL/d, a level that's expected to hold through 2025.
Gulf production has grown steadily since the 1980s, with output increasing about 150% since then. Barring the five-year period after the Deepwater Horizon tragedy in 2010, offshore production has shown incremental, but steady, gains.
Oil from the Gulf of Mexico is considered low-carbon relative to other basins. Shell designed the four-column semi-submersible rig for Vito with emissions in mind, saying the design was simplified and rescoped to cut about 80% of the expected carbon dioxide emissions over its lifespan.
"This investment will deliver additional high-margin, lower-carbon barrels from our advantaged upstream business, while maximizing our potential from Vito," Yujnovich added.
Shell recorded a $6.3 billion profit during the second quarter, a 19% decline from the three-month period ending in March. The drop was attributed to lower refining margins and weaker commodity prices.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
