Kaikias (MC768) - Shell

Project Overview

Kaikias (MC768) Field is an operational deepwater oil and gas project located in the Mars-Ursa basin of the US Gulf of Mexico.

Location

The field is situated approximately 201-210 kilometers (125-130 miles) from the Louisiana coast, in water depths of about 1,395 meters (4,573 feet) to 1,372 meters (4,500 feet).

Discovery and Appraisal

• The Kaikias field was discovered by Shell in August 2014.
• Initial appraisal activities followed in August 2015, with an appraisal well drilled to a depth of 34,500 feet, revealing more than 300 feet of net oil pay. Both vertical and horizontal drilling techniques were used to avoid hazardous salt formations.

Ownership

• Initially, Shell Offshore, a subsidiary of Royal Dutch Shell, held an 80% working interest in the project, while MOEX North America, a wholly-owned subsidiary of Mitsui Oil Exploration Co (MOECO), held the remaining 20%.
• In December 2023, Shell acquired the 20% stake from MOEX North America, gaining 100% ownership of the field, subject to federal regulatory approval.

Development

• The project was sanctioned in February 2017, with the final investment decision (FID) made at that time.
• The field is being developed in two phases as a subsea tieback to Shell’s Ursa oil and gas production hub, which is located in the same Mars-Ursa basin.
• The first phase of the development commenced production in May 2018, ahead of the original schedule. This phase includes three production wells tied back to the Ursa platform using a single flowline, with a peak production rate of up to 40,000 barrels of oil equivalent per day (boe/d).

Reserves and Production

• The Kaikias field is estimated to hold more than 100 million barrels of oil equivalent in recoverable resources.
• As of 2019, the field had remaining reserves of approximately 80.6 million barrels of oil and 3,760.44 million cubic meters of gas. Cumulative production by 2019 included 16.5 million barrels of oil and 1,073.2 million cubic meters of gas.
• In 2020, the field produced 13.98 million barrels of oil and 704.72 million cubic meters of gas per year. By 2022, production had adjusted to 9.19 million barrels of oil and 398.38 million cubic meters of gas per year.

Cost Efficiency and Infrastructure

• The project leverages existing infrastructure, including the Ursa production hub, to minimize costs. Shell redeveloped the existing exploration and appraisal wells for production, reducing the need for new drilling and achieving an approximate 50% reduction in overall development costs.
• The use of existing subsea and processing equipment at the Ursa hub, along with supply chain savings and simplified well design, further contributed to cost reductions.

Contractors Involved

• TechnipFMC was contracted to supply and install the subsea production system (SPS) and subsea riser, jumper, and flowline (SURF) equipment for the first phase of the project. This included the first application of compact pipeline end manifold and horizontal connection system technologies in the deep-water Gulf of Mexico.

Economic and Environmental Considerations

• The project is aligned with Shell’s strategy to increase production in the Gulf of Mexico, where the output has one of the lowest greenhouse gas (GHG) intensities for scope 1 and 2 emissions in the world.

In summary, the Kaikias field is a significant deepwater oil and gas project that leverages existing infrastructure to achieve cost efficiency and environmental sustainability, while contributing to Shell's production goals in the Gulf of Mexico.