Shell Announces Plan for Penguins Filed Redevelopment

Shell announced the final investment decision for the Penguins field redevelopment project in the U.K. sector, which includes the construction of a new-build Sevan Marine designed cylindrical floating production, storage and offloading (FPSO) vessel. 

The Penguins field is in 165 metres of water, approximately 150 miles north east of the Shetland Islands. Discovered in 1974, the field was first developed in 2002 and is a joint venture between Shell (50 percent and operator) and ExxonMobil (50 percent).
 
The Penguins field currently processes oil and gas using four existing drill centres tied back to the Brent Charlie platform. The redevelopment of the field, required when Brent Charlie ceases production will see an additional eight wells drilled, which will be tied back to the new FPSO vessel. Natural gas will be exported through the tie-in of existing subsea facilities and additional pipeline infrastructure.

According to Shell, the joint venture-owned/Shell-operated Sevan 400 FPSO is expected to have a peak production of circa 45,000 boe/d. Oil will be transported via tanker to refineries and gas will be transported via the FLAGS pipeline to the St Fergus gas terminal in north-east Scotland.

“Penguins demonstrates the importance of Shell’s North Sea assets to the company’s upstream portfolio,” said Andy Brown, Upstream Director. “It is another example of how we are unlocking development opportunities, with lower costs, in support of Shell’s transformation into a world class investment case.”
 
Steve Phimister, Vice President for Upstream in the UK and Ireland, said, “Shell has had a strong presence in this part of the northern North Sea for more than forty years. Having reshaped our portfolio over the last twelve months, we now plan to grow our North Sea production through our core production assets.”

Sevan Marine said it will receive an initial milestone payment, with further payments subject to three future milestones. Sevan Marine will also continue to provide engineering support during the construction of the unit over the next three to four years.

This final investment decision marks yet another milestone for the Sevan Marine cylindrical concept, an alternative to traditional ship-shaped FPSOs. The Penguins FPSO will be the sixth Sevan Marine designed cylindrical FPSO to be built.
 
“Together with the recent start-up of the Dana Petroleum operated Western Isles FPSO in the U.K. and cost reductions taken, we have come a long way in turning around Sevan Marine. We look forward to fully supporting the construction of the Penguins FPSO while further developing the Sevan Marine concept and winning new projects,” said Reese McNeel, CEO of Sevan Marine ASA.
 

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