Investment reflects recovery
Shell in first major foray in North Sea for six years
It will invest in expansion of the Penguins oil and gas field, including the construction of a floating production, storage and offloading (FPSO) vessel.
The Anglo-Dutch company sold around half of its assets in the North Sea last year.
“Penguins demonstrates the importance of Shell’s North Sea assets to the company’s upstream portfolio,” said Andy Brown, director of Shell’s oil and gas production, known as upstream.
The FPSO is expected to produce up to 45,000 barrels of oil equivalent per day.
The Shell-operated Penguins redevelopment is the first major project Shell has announced since 2012, when it made a final investment decision for the Fram field in the central North Sea.
The company said that the project is expected to generate a profit even with oil prices below $40 a barrel, making it competitive against other offshore basins and most of North America’s shale production.
The investment marks a significant change of fortunes as operators have scaled back oerating costs following the the plunge in oil prices in mid-2014.
It forced companies to become more efficient and introduce innovative ways of working.