First oil from Shell’s Vito project now expected in 2023, partner says

Shell’s Vito deepwater project in the U.S. Gulf of Mexico is now expected to start the first production in 2023 despite previous expectations for this to happen by the end of 2022.

This update was shared by Shell’s partner in the project, Norway’s Equinor, on Wednesday. Equinor has a 36.9 per cent interest in the Shell-operated Vito project, expected to start production in 2023, the Norwegian company said in a statement. Shell holds the remaining 63 per cent stake.

Equinor also boasted that its U.S. portfolio is delivering record high cash flow back to the company. With nine deepwater fields producing approximately 115,000 barrels of oil equivalent per day (boepd), Equinor says it is one of the largest players in the U.S. Gulf of Mexico.

As detailed by the Norwegian company, in the first six months of 2022, its equity oil and gas production from the U.S. was 332,000 boepd – 18 per cent lower than the corresponding period last year following the 2021 sale of the Bakken assets. Despite lower production, net operating income increased to $2.2 billion – more than six times higher than the first half of 2021.

Reuters also reported on Wednesday that Equinor’s U.S. country manager, Chris Golden, had told a news conference in Norway that Vito is in the early stages of being installed with the intent of achieving the first production in early 2023.

Offshore Energy has reached out to Shell, seeking confirmation and further details about the project’s progress.

A spokesperson for Shell told us that loop currents entering the Gulf of Mexico are the reason behind delays related to the installation activity, adding: “As with all of our Gulf of Mexico projects, we have a contingency in place to factor in potential impacts from these types of disruptions.”

The spokesperson also noted that achieving first oil production is still possible by the end of the year, but depending on the continued loop current and other potential weather impacts, Vito’s first oil date could slip into 2023.

“We will update our expected production timeline once we have a more accurate read of the impact of the weather conditions,” the spokesperson said.

Located over four blocks in the Mississippi Canyon area of the Gulf of Mexico, the Vito development will consist of eight subsea wells with deep (18,000 feet) in-well gas lift.

Following a final investment decision in April 2018, Vito was initially expected to start production in 2021. The giant platform for the Vito project was built by Singapore’s Sembcorp Marine and delivered to Shell in December 2021. Following its arrival in the U.S. in March 2022, the 40,000-ton semi-submersible platform was inspected by the BSEE at the Kiewit shipyard in Ingleside in May 2022.

As reported less than a month ago, the platform in mid-July 2022 sailed away from Kiewit to its final destination about 150 miles south of New Orleans for installation at a water depth of approximately 4,000 feet. This was revealed by Shell USA President, Gretchen Watkins, and also confirmed by Gate Energy and its CEO, Lee Jordan. At the time, it was expected that the production would start in late 2022.

Supported by Vito’s 4-column semi-submersible hull, the platform topsides weigh 9,200 tonnes and are designed to produce 100,000 bpd of oil and 100 MMSCFD of gas. The development currently has an estimated, recoverable resource of 300 million boe.

[This article has been updated with a statement from Shell]