Shell makes FID for Vito development in Gulf of Mexico

Shell Offshore, a subsidiary of Royal Dutch Shell, has made the final investment decision for Vito, a deep-water development in the U.S. Gulf of Mexico with a forward-looking, break-even price estimated to be less than $35 per barrel.

This decision sets in motion the construction and fabrication of a new, simplified host design and subsea infrastructure, Shell said in a statement on Tuesday.

Located over four blocks in the Mississippi Canyon area of the Gulf of Mexico, the Vito development will consist of eight subsea wells with deep (18,000 feet) in-well gas lift.

According to the company, Vito is expected to reach peak production of approximately 100,000 barrels of oil equivalent (boe) per day. The development currently has an estimated, recoverable resource of 300 million boe.

“With a lower-cost developmental approach, the Vito project is a very competitive and attractive opportunity industry-wide,” said Andy Brown, Shell Upstream Director.

In 2015, Shell began to redesign the Vito project, reducing cost estimates by more than 70% from the original concept. Shell explained that Vito’s cost savings are due to the simplified design, in addition to working collaboratively with vendors in a variety of areas including well design and completions, subsea, contracting, and topsides design.

The Vito development is owned by Shell Offshore (63.11% operator) and Statoil USA E&P Inc. (36.89%); the field is located beneath more than 4,000 feet of water, approximately 150-miles southeast of New Orleans.

Vito will be Shell’s 11th deep-water host in the Gulf of Mexico and is currently scheduled to begin producing oil in 2021.

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