First oil from ‘world class’ Gulf of Mexico project on track for mid-2025 as FPU nears completion

U.S.-headquartered LLOG Exploration is closing in on the first oil production from a deepwater project in the U.S. Gulf of Mexico as a floating production unit (FPU) destined to work on this oil development achieves refurbishment progress, which is expected to be wrapped up soon.

LLOG entered the Leon field as the operator in 2019 through an agreement with Repsol that also brought the company into the Castile field to accelerate plans and optimize the economics of developing both discoveries. The U.S. firm opted to reuse what was previously the world’s deepest floating production platform to develop the Leon and Castile discoveries in the deepwater Gulf of Mexico.

To this end, the firm bought the old Independence Hub platform from Genesis Energy with plans to refurbish it and turn it into an FPU named Salamanca. The Leon discovery, about 250 miles (approximately 402,336 meters) southwest of New Orleans in around 6,000 feet (around 1,829 meters) of water, was spud by Repsol in late 2014 and drilled to a total depth of about 32,000 feet (circa 9,754 m), encountering nearly 700 feet (about 213 meters) of high-quality net oil pay in multiple sands in the Lower Tertiary.

The Castile discovery was drilled in over 6,500 feet (around 1,981 meters) of water to over 31,000 feet (circa 9,449 meters), finding nearly 400 feet (approximately 122 meters) of high-quality net oil pay, also in the Lower Tertiary. According to LLOG, multiple significant achievements have marked major steps forward in the construction of the FPU Salamanca and the initial well operations at both Leon and Castile were completed.

The U.S. player is the operator of the FPU and the Leon and Castile discoveries, while Repsol and O.G. Oil & Gas are its partners in the project. Many companies have been hired to work on this project, including Trendsetter Engineering, Subsea7, Audubon, and ABL.

Eric Zimmermann, Chief Operating Officer of LLOG, commented: “LLOG has a long history of developing prolific projects in the GOM safely, efficiently and economically. We are pleased to be progressing another world class project and to have reached several important milestones while also optimizing financial flexibility through securing financing for the Salamanca project.

“The unique aspect of the Salamanca facility is that the FPU is the first refurbishment of a GOM facility that was in production and being brought into commerce as a producing asset again. By modifying a previously built production unit compared with constructing a new facility, we are able to significantly reduce the time to bring these discoveries online.”

The Salamanca project entails the refurbishment of a former Gulf of Mexico production facility, which is being transformed into an FPU with a capacity of 60,000 barrels of oil per day and 40 million cubic feet of natural gas per day to minimize environmental impact by reusing existing infrastructure and reduce time, ultimately enhancing economic returns.

The operator underlines that the hull refurbishment was done at Seatrium in Brownsville, Texas, and delivered to Kiewit’s yard in Ingleside on October 17, 2024. This is described as a critical milestone in the project’s timeline. In early November 2024, the new topside equipment and deck were rejoined to the hull and the final outfitting of the FPU is slated to be finished in early 2025.

Zimmermann continued: “Also, the project has a significantly positive environmental impact as it reuses an existing unit compared with abandonment of the unit, while also accomplishing approximately a 70% reduction in emissions impact compared to the construction of a new unit.

“As a Louisiana-based company, the other aspect of the project that brings us pride is the major construction for this project has been undertaken in shipyards and construction yards in Texas and Louisiana versus occurring internationally.”

The progress made so far brings LLOG closer to the project’s mid-2025 production target. The U.S. player claims that it also highlights its commitment to delivering high-quality, sustainable energy solutions. All initial wells to support the FPU Salamanca have been drilled and cased, including discovery wells drilled at Castile and Leon, with additional development wells drilled in 2023 and 2024.

Moreover, the final well was drilled in September 2024 at the Leon development in Keathley Canyon 686 #4, leading to better-than-expected results by encountering more than 1,000 feet of high-quality oil-bearing sands. The FPU will be located in Keathley Canyon 689 in approximately 6,400 feet of water.

“Our ongoing success and achievements in delivering complex deepwater projects reflect the dedication and expertise of our outstanding team. We look forward to continuing our progress and contributing to the energy needs of the Nation,” highlighted Zimmermann.