Page 11 - NorthAmOil Week 30 2021

NorthAmOil POLICY NorthAmOil

The legislators expressed particular con- competition, they added, Mexican energy pol-
cern about Mexican legislation and policies icy will not just hinder investment but may also
that have been introduced this year for the threaten jobs within the US energy sector. The
express purpose of ensuring the dominance current Mexican policy regime “undermines the
of government-run companies such as the spirit and letter of the US-Mexico-Canada free
national oil company (NOC) Pemex and the trade agreement (USMCA) and affects the live-
national power provider CFE. These moves lihoods of our fellow Americans working in the
have given Mexican regulators a green light to energy sector,” they said.
stall US investors by various means, including The letter to Biden drew criticism from Lopez
the cancellation or postponement of permits, Obrador, who stressed that the 20 signatories
they said. only represented a small fraction of the 435
They went on to say that the Lopez Obrador members of the US Congress. “There is really
administration’s energy policy was at odds with no problem,” he was quoted as saying by Argus
the spirit of the US-Mexico-Canada Agreement Media last week. “Mexico’s situation is excep-
(USMCA), a free-trade accord that took effect tional, unbeatable for investment. We see, as
last year, replacing 26-year-old North Ameri- always, some who protest, but they are an insig-
can Free Trade Agreement (NAFTA). Without nificant minority.”™

PROJECTS & COMPANIES

Shell announces new Gulf FID with Whale

GULF OF MEXICO A Royal Dutch Shell subsidiary announced this
week that it had made a final investment deci-
sion (FID) on the Whale project in the US Gulf
of Mexico.
Shell Offshore said Whale would entail 99%
replication of the hull and 80% replication of the
topsides from the company’s Vito project. The
latter is also currently under development in the
Gulf, with a targeted start-up date of 2022, and
involves a four-column semi-submersible host
facility.
Whale is located in Alaminos Canyon Block
773, adjacent to the Shell-operated Silvertip
field. It is estimated to have recoverable reserves
of around 490mn barrels of oil equivalent (boe)
and is expected to reach peak production of
roughly 100,000 boe per day (boepd). The facil-
ity will operate in more than 8,600 feet (2,621
metres) of water, and will be connected to 15
producing oil wells.
The project is anticipated to enter service in
2024. It will be the super-major’s 12th deepwa-
ter host facility in the Gulf, as well as the second
Shell-operated deepwater development to use a
simplified, cost-efficient host design, after Vito.
With this development approach, Shell said it This comes as Shell finds itself under mount- Whale will closely
anticipated an internal rate of return (IRR) of ing pressure – including from a Dutch court – to replicate the Vito
more than 25%. decarbonise its operations. project, which Shell is
“Whale is the latest demonstration of our The decision to move forward with the pro- currently constructing in
focus on simplification, replication and capital ject is also being taken at a time when FIDs the Gulf.
projects with shorter cycle times to drive greater on new standalone Gulf developments have
value from our advantaged positions,” stated become relatively uncommon. However, Shell’s
Shell’s upstream director, Wael Sawan. announcement illustrates that it is still possible
The company added that the development to commit to bringing new deepwater projects
would use energy-efficient gas turbines and online, with some modification or replication of
compression systems and would have among existing developments.
the lowest greenhouse gas (GHG) intensities in Shell operates Whale with a 60% interest,
the world for producing oil. while Chevron owns the remaining 40%.™

Week 30 29•July•2021 www. NEWSBASE .com P11