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Shell Begins First-Ever Jurassic Oil Production In Gulf Of Mexico

Royal Dutch Shell said on Thursday that it had started oil production at its Appomattox floating production system months ahead of schedule, opening a new frontier in the deepwater U.S. Gulf of Mexico and starting first production ever from a Jurassic reservoir in the region.

Appomattox—operated by Shell with 79 percent with a unit of China’s CNOOC holding 21 percent—is currently expected to produce 175,000 barrels of oil equivalent per day (boe/d). Appomattox is the first commercial discovery brought into production in the deepwater Gulf of Mexico Norphlet formation. The Appomattox development and production will be closely followed by industry analysts because it could give indications about other potential reservoirs in the Norphlet formation.

In May last year, Shell said that it had made a large deepwater exploration discovery in the U.S. Gulf of Mexico, just 13 miles from Appomattox. The Dover discovery was Shell’s sixth in the Norphlet geologic play in the U.S. Gulf of Mexico, and is considered an attractive potential tieback due to its proximity to Appomattox.

“Appomattox creates a core long-term hub for Shell in the Norphlet through which we can tie back several already discovered fields as well as future discoveries,” Andy Brown, Upstream Director at Shell, said in today’s statement announcing the start-up of oil production at Appomattox.

The Appomattox development has cut costs by more than 40 percent since taking final investment decision in 2015, Shell said, without specifying how much it had spent.

“The start of production at Appomattox is only just the beginning of further maximising the flow of resources in the prolific Norphlet surrounding Appomattox,” Shell said.

“If the Jurassic roars to life in 2019, it could give operators greater confidence in the play’s potential,” William Turner, senior research analyst at Wood Mackenzie, said at the end of last year in an analysis on the U.S. Gulf of Mexico, expecting this year to be historic for the region in terms of exploration and first-ever production from a Jurassic play.  

“All eyes will be on the well performance of the potential heavy hitter,” WoodMac said, referring to Shell’s Appomattox.   

By Tsvetana Paraskova for Oilprice.com

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