Shell awards Vito topsides deal to Sembcorp Marine

Singapore’s Sembcorp Marine Ltd has won a contract by Shell to construct and integrate the hull, topsides and living quarters of the Vito semi-submersible Floating Production Unit (FPU).

Vito is a deep-water development in the U.S. Gulf of Mexico for which Shell in April made a Final Investment Decision, with the break-even price estimated to be less than $35 per barrel.

Sembcorp on Monday shared that the Vito contract covers installation of Shell-furnished equipment, and follows a Letter of Intent between the two parties announced on December 5, 2017.

Supported by the Vito FPU’s 4-column semi-submersible hull, the topsides weigh 9,200 tonnes and are designed to produce 100,000 bpd of oil and 100 MMSCFD of gas.

The Vito host will be located at a water depth of 1,234m in the Mississippi Canyon Block 984 in the Gulf of Mexico, 241km south of New Orleans, Louisiana, in the US.

William Gu, Sembcorp Marine Senior Vice President and Head of Rigs & Floaters, said: “We are delighted that Shell has awarded the Vito FPU contract to us. We are fully committed to executing and delivering the project safely and efficiently.”

This decision sets in motion the construction and fabrication of a new, simplified host design and subsea infrastructure, Shell said in a statement on Tuesday.

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.

According to the company, Vito is expected to reach peak production of approximately 100,000 barrels of oil equivalent (boe) per day. The development currently has an estimated, recoverable resource of 300 million boe.

“With a lower-cost developmental approach, the Vito project is a very competitive and attractive opportunity industry-wide,” said Andy Brown, Shell Upstream Director.

In 2015, Shell began to redesign the Vito project, reducing cost estimates by more than 70% from the original concept. Shell has explained that Vito’s cost savings are due to the simplified design, in addition to working collaboratively with vendors in a variety of areas including well design and completions, subsea, contracting, and topsides design.

The Vito development is owned by Shell Offshore (63.11% operator) and Statoil USA E&P Inc. (36.89%); the field is located beneath more than 4,000 feet of water, approximately 150-miles southeast of New Orleans.

Vito will be Shell’s 11th deep-water host in the Gulf of Mexico and is currently scheduled to begin producing oil in 2021.