Shell Starts Production at Perdido - World's Deepest Offshore Drilling and Production Facility

HOUSTON, March 31 /PRNewswire/ -- Shell today produced its first oil and natural gas from the Perdido Development, the world's deepest offshore drilling and production facility. Located in an isolated, ultra-deep sector of the Gulf of Mexico, Perdido marks a new era in innovation and safely unlocks domestic sources of energy for US consumers. The facility sits in approximately 2,450 meters (8,000 feet) of water, which is roughly equivalent to six Empire State Buildings stacked one atop the other, and will access reservoirs deep beneath the ocean floor. Perdido smashes the world water depth record for an offshore platform by more than 50%.

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"Perdido is an impressive project in a strong Gulf of Mexico portfolio that continues to grow," said Marvin Odum, Upstream Americas Director, Shell Energy Resources Company. "Perdido presented technical challenges unlike we've ever seen in the Gulf of Mexico. Shell's team used its expertise to open this new frontier and confront complex reservoir characteristics, extreme marine conditions, and record water depth pressures. Perdido demonstrates what companies like Shell can do when US federal lands and waters are opened to responsible energy exploration and production."

From the first lease purchase to today's production, the Perdido Development required an industry workforce of approximately 12,000 people, including employees and contractors. Shell designed, and operates, the Perdido host spar, a floating production facility, which is jointly owned by Shell (35%), Chevron (37.5%), and BP (27.5%).

The facility will produce from the Great White, Silvertip, and Tobago offshore fields, requiring perhaps as many as 35 wells over the life of the fields. Tobago sits in more than 2,900 meters (9,600 feet) of water and surpasses the world depth record for a completed subsea well. In addition, all Perdido subsea fields will utilize a unique and innovative subsea separation and boosting system to enable oil and natural gas recovery.

"This is a new frontier in many respects," said Odum. "Perdido's floating production facility can be expanded to serve the future potential in the area, and we can apply the technology and expertise utilized at Perdido to other similarly challenging environments in the future."

The Perdido Development will ramp up to annual peak production of more than 100,000 barrels of oil equivalent per day.

Also in the Gulf of Mexico, Shell recently announced another deepwater discovery at Appomattox, which is in addition to recent exploration success at West Boreas, Vito, and Stones. These discoveries underpin the potential for four new production hubs.

Perdido fast facts:

• One day's production from Perdido is equivalent to the energy needed to fuel 500 cars for 15 years
• First commercial production from the Lower Tertiary reservoir in the Gulf of Mexico
• First Gulf of Mexico full host subsea separation and boosting removes about 2,000 psi of backpressure from the wells
• First spar wet tree Direct Vertical Access (DVA) wells
• The project achieved 10-million hours without a Lost Time Injury
• Located 320 kilometers (200 miles) from the Texas coast in Alaminos Canyon Block 857
• The Great White field represents about 80% of Perdido's total estimated production
• Perdido's project life is expected to be about 20 years
• Construction of the Perdido host spar began in late 2006
• Topsides were mated with the spar in a single lift in early 2009

Royal Dutch Shell plc

Royal Dutch Shell plc is incorporated in England and Wales, has its headquarters in The Hague and is listed on the London, Amsterdam, and New York stock exchanges. Shell companies have operations in more than 100 countries with businesses including oil and gas exploration and production; production and marketing of Liquefied Natural Gas and Gas to Liquids; manufacturing, marketing and shipping of oil products and chemicals and renewable energy projects including wind and solar power. For further information, visit www.shell.com

For additional stories, photographs, a map of the area, video, and animations of the Perdido Development, visit the Perdido Web site.

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SOURCE Shell Oil Company