Shell creates global deepwater unit

Royal Dutch/Shell companies are rolling their deepwater expertise into a single, global organization. The unit, known as Shell Deepwater Services (SDS) and based in Houston, will begin operations around July 1.

The organization has been in formation during the past 5 months, said Mahdi Hasan and Richard A. Sears, Shell vice-presidents, who unveiled the plan at the Offshore Technology Conference in Houston earlier this month.

Rationale

SDS is an attempt to channel Shell's deepwater exploration and production expertise into all deepwater projects in which its affiliates are involved, while continuing to capitalize on local affiliates' country relationships, Sears said.

SDS is to be a business-driven entity that has evolved from Shell Deepwater Development Systems Inc. (SDDS), which previously had performed only development planning and development execution. Shell affiliates operate or participate in deepwater E&P projects in more than 20 countries.

Hasan said the new organization will be a cost-effective and competitive entity. The goal is to take a seamless, full-cycle approach that involves, for example, conceptualizing field development technology needs even as the first exploratory wells are being drilled in a given area.

SDS will concern itself with projects in as little as 200 m of water in West Africa and perhaps even shallower water in areas where cutting-edge technology is needed. It will focus on 1,500 m of water or more in the Gulf of Mexico.

The organization is still being formed, and only four vice-presidents have been named thus far. SDS will draw on personnel currently with Shell affiliates in Houston, New Orleans, and The Hague, including technology centers at Bellaire, Tex., and Rijswijk, Netherlands.

Shell planners in late 1997 began wondering where they could get the resources to tackle all relevant deepwater projects. It was clear that the company could not fully staff a deepwater unit in every country.

Shell projects

Meantime, SDDS continues to bring on stream a number of deepwater Gulf of Mexico discoveries, either with subsea wells tied back to existing infrastructure or with tension-leg platforms (TLPs). In March 1999, it set a record for deepest-water TLP with its fourth TLP, Ursa, set in 3,800 ft of water.

Shell has interests in three Gulf of Mexico deepwater subsea developments that will begin producing in 1999: Angus (2,000 ft), Macaroni (3,700 ft), and Marlin (3,240 ft). Shell has also scheduled two more deepwater subsea tie-backs for 2000: Europa (3,900 ft) and King (3,280 ft). And in 2001, it expects to be producing from its fifth Gulf of Mexico TLP, Brutus (2,985 ft).

Shell also has interest in a number of deepwater projects in other parts of the world. These include, the Laminaria/ Corallina floating production, storage, and offloading vessel (FPSO), on stream in 1999 (1,310 ft of water in the Timor Sea off Australia), Malampaya subsea tie-back, on stream in 2002 (2,790 ft of water, off the Philippines), and Bonga FPSO, on stream in 2003 (3,280 ft of water off Nigeria). According to Shell, the Malampaya project will include the longest (313 mile), continuous deepwater pipeline. The length was required to avoid corals, sea grasses, sensitive habitats, and fisheries.