Shell sets its cap on enlarging US oil arsenal with subsea tie-back to Gulf of Mexico asset

Shell Offshore, a subsidiary of the UK-headquartered energy giant Shell, has greenlighted another multi-well development project to enrich oil production from an asset lying in a water depth of about 2,450 meters (approximately 8,000 feet) in the U.S. Gulf of Mexico (GoM), said to represent the world’s deepest floating oil platform.

With a final investment decision (FID) for the Phase 3 Silvertip project, Shell will embark on a two-well campaign to deliver two wells designed to boost production at its operated Perdido spar within Alaminos Canyon around 200 miles (about 322 kilometers) south of Galveston, Texas.

Rich Howe, Shell’s Executive Vice President for Deep Water, commented: “This investment at Perdido is another example of our focus on high margin, lower carbon intensity barrels. As the largest operator in the US Gulf of Mexico, we prioritize opportunities nearby our existing assets in these advantaged corridors, where we are well-positioned to develop shorter-cycle, high value tie-back opportunities.”

The first production from these wells in the Silvertip Frio reservoir, forecast to collectively produce up to 6,000 barrels of oil equivalent per day (boe/d) at peak rates once they are tied into existing subsea infrastructure, is expected in 2026. The project is operated by Shell (40%) with Chevron (60%) as its partner.

“The Phase 3 Silvertip project reinforces Shell’s long-term commitment to the United States, in particular to the Gulf of Mexico, where production is essential to ensuring a reliable and secure supply of energy. Additionally, production in the US Gulf of Mexico has among the lowest greenhouse gas (GHG) intensity in the world for producing oil,” underlined the operator.

The Perdido offshore development comprises a spar platform that serves as a production hub for three deepwater fields: Silvertip, Tobago, and Great White, where a three-well campaign, anticipated to be completed in April 2025, is predicted to produce up to 22,000 barrels of oil equivalent per day (boe/d) at peak rates.

Shell Offshore is the operator of the Perdido Regional Host with a 35% interest while Chevron U.S.A. (37.5%), 3C Perdido Holdings (26.5%), and BP Exploration & Production (1%) act as its partners. The current estimated recoverable resource volumes of Phase 3 Silvertip are 17 million boe.

Shell is also actively working on bolstering its portfolio in other regions where it holds and operates oil and gas assets. To this end, the firm decided to combine its UK offshore assets with Equinor to create a combined joint venture company the duo sees as the largest independent oil and gas player in the UK sector of the North Sea.