Royal Dutch Shell and its partner Mitsui have made final investment decision to move ahead with the development of the Kaikias deep-water project in the Gulf of Mexico.

Located in the prolific Mars-Ursa basin approximately 210km from the Louisiana coast, the oil and gas project is planned to be developed in two phases. Production from the first phase is scheduled to commence in 2019.

The first phase of project involves development of three wells which are expected to have peak production capacity of up to 40,000 barrels of oil equivalent per day (boe/d).

Shell said that the project will utilize a subsea tie-back to the nearby Ursa oil and gas production hub, thus reducing the need for additional top-side modifications and operating costs.

Royal Dutch Shell upstream director Andy Brown said: “Kaikias is an example of a competitive and capital-efficient deep-water project using infrastructure already in place

“The team has done a great job to reduce the total cost by around 50% by simplifying the design and using lessons learned from previous subsea developments.”

In order to reduce the need for new drilling, Shell has re-developed the exploration and appraisal wells for production at the field.

According to estimates, the field holds more than 100 million barrels of oil equivalent recoverable resources.

Shell operates the field with 80% stake while Moex, a unit of Mitsui Oil Exploration, owns the remaining 20% interest. Mitsui Oil Exploration is a subsidiary of Mitsui.

Shell expects to increase its deep-water production capacity to more than 900,000boe/d by the end of the decade from already discovered, established reservoirs. 

Image: Illustration of production facility of Kaikias field development project. Photo: courtesy of MITSUI & CO., LTD.