Shell keeps deepwater viable
with Appomattox project
Competitive rescoping lowers break-even costs
Shell has revamped its deepwater strat- egy to fit the needs of a low oil price nvironment, and its Appomattox project in the Gulf of Mexico is a key example of how the company is keep-
ing deepwater not only profitable, but also
competitive with onshore projects.
With the recent completion and arrival
of the hull in Texas, and construction of the
host platform and fabrication of subsea infrastructure currently underway, the Appomattox project is more than 65% complete. First
production is scheduled for 2020.
Since sanctioning the project in 2015, Shell
has been able to reduce its capital expenditures on the project by 40%. It has done this
by increasing the efficiency of the project’s
design, its scope, and by working to bring its
drilling costs down. Taken together, Shell has
been able to bring break-even prices on the
Appomattox project down to levels that are
much more competitive in the current market.
The final investment decision for the project
was taken in July 2015, leading to the start of
The project calls for a semisubmersible,
four-column production host platform; a
subsea system featuring six drill centers;
15 producing wells; and five water injection
wells. The infrastructure at the project site
will have a design capacity ranging between
120,000 boe/d and 200,000 boe/d.
The new production platform will be Shell’s
eighth and biggest floating platform in the
Gulf of Mexico. Shell was able to reduce the
platform’s cost by approximately 20% based
on the experience gained from the develop-
ment of the previous four-column production
platforms in the Gulf of Mexico, such as the
Olympus tension leg platform.
Crude oil produced from the project will be
conveyed via a new 24-in. diameter pipeline,
named the Mattox Pipeline, to an existing
offshore structure in the South Pass area and
further supplied onshore using an existing
pipeline. The Mattox Pipeline, which will be
fully-owned and operated by Shell Pipeline
Co., will feature pre-installed subsea connection points to accommodate future interconnections.
The sanctioned project includes capital for
the development of 650 MMboe resources at
the Appomattox and Vicksburg fields. The Appomattox field is primarily situated in Missis-
sippi Canyon block 392 and straddles blocks
391 and 348, whereas the Vicksburg discovery
is situated in Mississippi Canyon block 393.
A tieback from the Vicksburg field to the
Appomattox platform is already planned, and
a tieback from the Gettysburg field is be-
ing reviewed. If this field is tied back to Ap-
pomattox, it could bring the total estimated
discovered resources in the area to more than
The Appomattox field was discovered in
March 2010 with a discovery well in Missis-
sippi Canyon block 392. The well was drilled to
a depth of 7,643 m ( 25,077 ft) and encountered
approximately 162 m (530 ft) of oil pay.
It was followed by drilling an appraisal side-
track well that same year to a depth of 7,910 m
( 25,950 ft), which encountered approximately
116 m (380 ft) of oil pay. The field was further
appraised in February 2012 by drilling an
appraisal well in Mississippi Canyon block
348, at a water depth of approximately 7,257
ft and to a total depth of 25,851 ft. The well
encountered approximately 150 ft of oil pay.
The Vicksburg field was discovered in July
2013 by a discovery well at Mississippi Canyon
The Appomattox development will initially produce from the Appomattox and Vicksburg fields, with
average peak production estimated at 175,000 boe/d. (Courtesy Shell)