A North Sea development has been approved by Royal Dutch Shell, the first in a period of over six years. According to Shell the Penguins field will be redeveloped in partnership with ExxonMobil with costs estimated to exceed $1 billion. It will be the first new installation in the area in close to three decades. The North Sea is one of the most mature gas and oil basins in the world.
Since the crash of oil prices four years ago, Shell’s investment will be one of the largest in North Sea. The investment is expected to raise confidence in the oil and gas sector in the UK as the industry gradually recovers from a downturn.
North Sea exit
In 2017 Royal Dutch Shell divested from over half of its production base in the United Kingdom by selling to Chrysaor thereby reinforcing perceptions that big gas and oil producers were moving out of the North Sea. Shell has however said it is committed to its remaining portfolio in the UK and that North Sea production will be ramped up in coming years.
To redevelop the Penguins field, an FPSO (floating, production, storage and offloading) vessel with a capacity of 45,000 bpd will have to be constructed. And because production from the Penguins field goes through the Brent Charlie platform of Shell, there is need for new infrastructure in order to ensure the flow of oil into the next decade since the four-decade old Brent field will be decommissioned soon.
Solar energy investment
The approval of a North Sea development by Shell comes in the wake of the oil giant making an investment in a solar energy developer in the United States as the Anglo-Dutch firm continues its foray into the electricity sector. Shell will purchase a 44% interest in Silicon Ranch Corporation, a firm based in Nashville, Tennessee. Currently there are around 100 solar facilities spread across the United States that are owned and operated by Silicon Ranch. Per a statement the investment is worth approximately $217 million.
“With this entry into the fast-growing solar sector, Shell is able to leverage its expertise as one of the top three wholesale power sellers in the U.S., while expanding its global New Energies footprint,” said the solar vice president at Royal Dutch Shell, Marc van Gerven, in a statement.
Silicon Ranch’s facilities at present have a capacity to produce 1.9 gigawatts. The investment by Shell will allow the solar firm to penetrate new markets. Currently Silicon Ranch has operations in 14 states.