“Shell’s final investment decision regarding the PowerNap field reflects a broader trend of majors embracing subsea tie-backs that offer quicker paths to first oil and attractive returns. We estimate the PowerNap field to have a development breakeven in the low US$30’s per barrel (bbl).”
“This comes on the heel of Shell bringing the Kaikias subsea tie-back online in 2018, with an estimated development breakeven in the low US$30’s/bbl, and BP entering into the Nearly Headless Nick tie-back expected to come online by the end of 2019, just a year after discovery.
“Recent exploration in the region has demonstrated how Majors in the deepwater Gulf of Mexico have adapted a complimentary strategy of pursuing traditional large prospects, in addition to infrastructure-led exploration.
“With internal rate of returns above 30% and development breakeven in the low-to-mid US$30’s, the sanctioning of subsea tie-backs is proving that deepwater can compete with tight oil.”
Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/02082019/wood-mackenzie-comments-on-shells-decision-to-develop-powernap-deepwater-project/