Massive Shell oil production vessel heads to deepwater Gulf of Mexico

|By:, SA News Editor

Royal Dutch Shell’s (RDS.A, RDS.B) new $1B oil production vessel began a 15K-mile journey this week from a Singapore shipyard to the Gulf of Mexico, where it will become the fourth ultra deepwater production facility to extract hydrocarbons from the Lower Tertiary.

Shell plans to begin filling barrels next year with oil from two wells drilled in ~9,500 ft. of water, the deepest-ever depth.

But the production vessel’s 1-2 month trip comes amid an industry whiplash from an oil price collapse that could force oil companies to scrap up to $48B worth of development spending in the Lower Tertiary over the next 15 years, according to energy research firm Wood Mackenzie.

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