Shell’s Penguins Redevelopment – What’s the latest?

March 23, 2018

ROYAL DUTCH SHELL PLC’S NORTH SEA PENGUINS FIELD REACHED FINAL INVESTMENT DECISION TO REDEVELOP THE AREA WITH A $1bn INVESTMENT IN JANUARY 2018.

First developed in 2002 after its discovery in 1994, the field was originally a joint venture between the Anglo-Dutch energy giant, who operate the field, and ExxonMobil. The field is located approximately 150 miles north-east of the Shetland Islands in over 500ft of water. Currently, the field processes oil and gas via four drill centres that are connected to the Brent Charlie platform, which is due to cease production.

This heavy investment will contribute to the drilling of 8 additional wells, which will be tied back to the new FPSO vessel, and further pipeline infrastructure. It will be first new manned installation for Shell in the northern North Sea in almost 30 years, and their biggest project sanction since 2011, before the crash of crude oil prices.

Shell awarded Fluor Corporation the contract for engineering, procurement and fabrication of the FPSO in the fourth quarter of last year. They will have full responsibility for the design and delivery of the pre-commissioned vessel to the field area. The project will be led by Fluor’s Philippines office (Manila) following their success in delivering the Malampaya Phase 3 Project. The platform will be designed to operate continuously for 20 years, helping to extend the life of the existing Penguins fields by a decade.

It has also been confirmed that Sevan marine will be providing technical support during the design phase of the project as well as the technology for the cylindrical 400 FPSO. The plan is to transport oil via tanker to refineries and gas by the FLAGS pipeline to the gas terminal in St Fergus, north-east Scotland.

The forecast peak production capacity will be circa 45,000 barrels of oil equivalent per day (boe/d), and storage capacity will be 400,000 barrels. Shell has referred to this redevelopment as “an attractive opportunity with a competitive go-forward break-even price below $40 per barrel”, which is triple the current oil and gas output from the fields.

UPDATED ON THE 11/05/218:

Following their FID in January earlier this year, a Shell geologist and spokesperson confirmed last week at the DEVEX conference in Aberdeen, Scotland, that the Sevan 400-style FPSO is due to arrive at the Penguins cluster in the year 2021. He also confirmed that steel has been cut on the floating production, storage and offloading vessel ahead of the eight-well project that is set to begin in summer 2019, mean construction can begin.
The competitively scoped subsea is forecast to be installed in two years’ time, shortly before the arrival of the FPSO. Shell are prioritising the Penguins field, hoping that the site will remain significant in the northern North Sea all the way until 2040. They aim not only to produce Penguins field, but many other projects in the region as well as expand and add growth to it. The Penguins FPSO will be the first of its kind to be operated by the major oil giant.

With such a unique design, we envisage that there will be numerous requirements for engineering professionals with experience of cylindrical FPSOs, so please ensure that you send us your up-to-date CV to be considered for these positions!