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Deep-water giant begins Gulf production

By Zain Shauk and Collin Eaton Houston Chronicle
Feb. 4, 2014 at 5:23 p.m.


Royal Dutch Shell said Tuesday that it had started its Olympus platform, the first of several new platforms expected to push Gulf of Mexico oil production to a record level by 2016.

Olympus, in water 3,000 feet deep about 130 miles south of New Orleans, will eventually add as much as 100,000 barrels of oil equivalent per day to production from Shell's Mars field.

A wave of new projects are expected to come online in the Gulf over the next two years, potentially pushing the region's daily oil production past its previous peak of 1.8 million barrels per day by 2016, Wood Mackenzie forecasts. The Gulf's daily production could grow by 180,000 barrels to 1.55 million barrels per day this year alone, according to the Energy Information Administration.

Olympus is the first major project Shell has launched in the Gulf since the partial federal drilling moratorium in 2010 after the worst oil spill in U.S. history, when BP's Macondo well blew out. Shell plans to follow the newly fired-up project with another later this year and a third in 2016.

Shell's next project will fire up later this year 225 miles southwest of New Orleans at its Cardamom discovery, where the company will connects subsea wells to its Auger platform in more than 2,700 feet of water. The Auger was the first platform Shell launched into the Gulf, in 1994. The subsea wells in the Cardamom are expected to pump 50,000 barrels of oil equivalent per day at their peak.

The company expects to start producing oil in 2016 from its ultradeep-water Stones field, about 200 miles southwest of New Orleans.

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