Shell announces start of production at first phase of Kaikias in the Gulf of Mexico

THE HAGUE -- Shell Offshore, Inc. (Shell), a subsidiary of Royal Dutch Shell plc, has announced the early start of production – about one year ahead of schedule – at the first phase of Kaikias, an economically resilient, subsea development in the U.S. Gulf of Mexico, with estimated peak production of 40,000 boed.

Shell has reduced costs by around 30% at this deepwater project since taking the investment decision in early 2017, lowering the forward-looking, break-even price to less than $30/bbl of oil.

“We believe Kaikias is the most competitive subsea development in the Gulf of Mexico and a prime example of the deepwater opportunities we’re able to advance with our technical expertise and capital discipline,” said Andy Brown, upstream director at 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 mi (210 km) 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.