Shell's (RDS.A) Appomattox Project Achieves a Key Milestone
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Zacks Equity Research
ZacksAugust 14, 2017
Integrated oil and gas company Royal Dutch Shell plc RDS.A recently announced that the massive four-column, semi-submersible watercraft of the Appomattox project has begun its one month long journey. This is a major milestone achieved by the company as it brings Shell a step closer to the completion of this multibillion deepwater oil and gas project in Gulf of Mexico.
The watercraft is en route from South Korea to Ingleside, Texas, where the remaining construction work is likely to get completed. With this recent development, over 60% of the fabrication is complete. The project is on schedule and is likely to begin oil production by the end of 2020. The average peak production from the field is estimated to be 175,000 barrels of oil equivalent per day (Boe/d).
Shell owns a 79% stake in the Appomattox and Vicksburg deepwater fields and the remaining 21% interest is held by Nexen Petroleum Offshore, Inc., a wholly owned subsidiary of CNOOC Limited CEO. The company announced its final decision to invest in the project in July 2015. The project has seen a 20% savings from its original investment proposal owing to designing technology. Back in May 2017, Shell awarded a contract to the oilfield services provider Oceaneering International, Inc. OII for the installation of ancillary flowline hardware and for providing other required services with respect to the project.
Shell owns a strong and diversified portfolio of global energy businesses and a strong inventory of development projects that are likely to boost volume growth over the long run. Appomattox is one of the most lucrative and significant deepwater development projects of Shell offering attractive long-term opportunities in the Gulf of Mexico. The other deepwater projects in Gulf of Mexico include Kaikias and Coulomb Phase 2. By 2020, the company expects around 900,000 Boe/d from its deepwater projects.