Shell greenlights drilling program for 2024 and wraps up survey work in North Sea

UK-headquartered energy giant Shell has put a stamp of approval on its planned two-well drilling campaign in 2024 while site survey works associated with this exploration program in the North Sea have been finished at one of these prospects.

An update confirming the progress being made to put all the required pieces together to embark on the drilling of Shell’s Selene and Pensacola wells, slated for 2024, came from the oil major’s partner, Deltic Energy. 

After a positive well investment decision for Selene was made in July 2022, the North Sea Transition Authority (NSTA) gave its approval and the P2437 license moved into the next phase, enabling Shell to assume operatorship of the license as part of the process of moving into the drilling phase.

According to Deltic, the geotechnical site investigation works on the preferred surface location of the Selene exploration well have been completed and the vessel has been demobilized from the site. The results of this work will be incorporated into the operational drilling plan and the well remains on track to be drilled in 3Q 2024.

These site surveys are designed to ensure the safe installation of the rig at the selected well location, representing another key step on the path to drilling this high-impact, low-risk prospect. The Selene prospect is considered to be one of the largest unapprised structures in the Leman Sandstone fairway of the Southern Gas Basin, estimated to contain gross P50 prospective resources of 318 bcf of gas, with a geological chance of success of 70%. 

Moreover, Deltic confirmed that the JV, led by Shell, has now finalized the positive well investment decision on license P2252 and approved the 2024 work program and budget that allows for the drilling of the Pensacola appraisal well in late 2024. At the start of 2023, Shell made – what is said to be – a “transformational gas discovery“ at the Pensacola gas prospect in the Southern North Sea, with a P50 estimated ultimate recovery of 302 bcf of gas.

This prospect is perceived to be the largest natural gas discovery in the North Sea in over a decade. The site survey works focused on the Pensacola appraisal well location are due to be carried out in the first half of 2024 while the rig tendering process for both Selene and Pensacola is ongoing.

Shell has been a busy bee lately. A few days ago, the oil major put the wheels into motion to divest its interest in a giant gas discovery in the Norwegian Sea to Equinor, which enables Norway’s state-owned energy giant to expand its stake in this asset and take over the operatorship helm.

While this sale will downsize Shell’s global oil and gas portfolio, the firm’s acquisition of the remaining stake in an asset in the U.S. Gulf of Mexico, enables it to consolidate its ownership in a deepwater field, which has been developed as a subsea tie-back to the nearby Ursa production hub.

During the 4th cycle of the permanent concession offer held by the National Agency of Petroleum, Natural Gas and Biofuels (ANP) in Rio de Janeiro on December 13, Shell Brasil Petróleo Ltda, a subsidiary of the UK oil major, won 29 blocks in the Pelotas Basin. Out of these 29 blocks, 26 are in partnership with Petrobras (operator), and three are in consortiums formed with Petrobras (operator) and CNOOC Petroleum.

The total signing bonus will be approximately R$171 million (over $34.6 million), of which R$51 million (more than $10.3 million) refers to Shell’s 30% stake in these projects. With the acquisitions of these new blocks, Shell will have a stake in 68 oil and gas contracts in Brazil.

The UK-headquartered oil major is also among the three oil and gas players, which recently inked contracts for four offshore blocks in Uruguay to embark on exploration and eventual exploitation of oil resources off South America.

In the meantime, Shell is actively pursuing more hydrocarbons. To this end, the company greenlighted a phased offshore drilling program to bolster production at a development project in the U.S. Gulf of Mexico.