Penguin West

Penguins Redevelopment Oil Project Profile

Location and Geology

• The Penguins Redevelopment project is located in the UK Continental Shelf (UKCS), specifically in blocks 211/13 (Penguins West) and 211/14 (Penguins East) in the northern North Sea. It is approximately 150 km from the Scottish coastline, near the UK/Norway median line.
• The project involves a cluster of oil and gas condensate accumulations, including the Penguins A, C, D, and E fields, discovered in 1974.

Ownership and Operation

• The Penguins Redevelopment project is owned by Shell U.K. Limited (50%) and NEO Energy Group (50%).
• The project is operated by Shell U.K. Limited.

Project History and Development

• The initial development of the Penguins fields was delayed due to high subsurface risks and the large areal footprint of the cluster. Previous attempts to develop the field were suspended in the late 1990s due to low oil prices.
• The final investment decision (FID) for the Penguins Redevelopment was approved in 2018. This decision was made to extend the field life and production beyond 2035, following the cessation of production at the Brent Charlie platform in 2021.

Infrastructure and Technology

• The redevelopment involves the installation of new subsea infrastructure, including approximately eight wells, a Floating Production, Storage, and Offloading (FPSO) facility, subsea manifolds, and subsea trees.
• The FPSO, constructed by China’s Offshore Oil Engineering Company (COOEC), is a cylindrical FPSO standing 118 meters tall. It was delivered from China and underwent commissioning at Aibel’s Haugesund yard in Norway before being towed to its location in the North Sea.
• The wellstream will be exported through a 65-km pipeline to the Brent C platform, where it will be commingled with other fluids. Oil will then be sent through the Cormorant pipeline system to the Sullom Voe terminal on Shetland, while gas will be piped through the Far-north Liquids and Associated Gas Gathering System trunkline to the St. Fergus terminal north of Aberdeen.

Production and Reserves

• Production from the Penguins Redevelopment is expected to start in the third or fourth quarter of 2024 and is forecast to peak in 2025. The production is anticipated to continue until the field reaches its economic limit in 2039.
• The project is expected to unlock 80 million barrels of oil that would have otherwise been left stranded. Peak production is estimated at 45,000 barrels per day.
• The estimated resources for the Penguins Redevelopment are approximately 57 million barrels of oil equivalent (boe).

Contractors and Partners

• Key contractors involved in the project include:
  • Main EPC: Subsea 7
  • EPC Contractors: Magnora and Fluor
  • Other Contractors: Aibel, Det Norske Veritas Holding, Fuglesangs, DMAR Engineering, and GMC Inspection Services.

Environmental and Regulatory Aspects

• The project aims to extend field life and production with significantly reduced emissions intensity compared to the previous host, Brent Charlie.
• The Penguins Redevelopment Project Environmental Statement Addendum was submitted in November 2017, and subsequent updates have been made to reflect the latest environmental impact assessments and regulations.

Financial and Timeline Details

• The total development cost for the Penguins Redevelopment is expected to be around $1,000 million.
• The project is currently in the commissioning stage, with the FPSO installation and hook-up planned for the second and third quarters of 2024.