Shell has reported the early start of production – around one year ahead of schedule – at the first phase of Kaikias, a subsea development in the US Gulf of Mexico. Peak production is expected to reach 40,000 boe/d. The company also reports that it has reduced costs by around 30% at this deepwater project since taking the investment decision in early 2017, lowering the forward-looking, break-even price to less than $30/b of oil.
Kaikias is located in around 4,500 ft (1,372 metres) of water in the prolific Mars-Ursa Basin. Shell holds an 80% working interest, as operator, partnered by MOEX North America (20%), a wholly owned subsidiary of Mitsui Oil Exploration.
Field production from four wells is being sent to the Shell-operated (45%) Ursa hub, which is co-owned by BP (23%), ExxonMobil (16%) and ConocoPhillips (16%). From the Ursa hub, volumes ultimately flow into the Mars oil pipeline.