HOUSTON, Dec. 12, 2024 /PRNewswire/ -- Shell Offshore Inc., a subsidiary of Shell plc (Shell), announced a Final Investment Decision (FID) on the Phase 3 Silvertip project, which will deliver two wells to boost production at the Shell-operated Perdido spar in the US Gulf of Mexico (GoM). These wells, located in the Silvertip Frio reservoir (Shell – 40%, operator; Chevron 60%), are expected to collectively produce up to 6,000 barrels of oil equivalent per day (boe/d) at peak rates. First production is expected in 2026.

"This investment at Perdido is another example of our focus on high margin, lower carbon intensity barrels," said Rich Howe, Shell's Executive Vice President for Deep Water. "As the largest operator in the US Gulf of Mexico, we prioritize opportunities nearby our existing assets in these advantaged corridors, where we are well-positioned to develop shorter-cycle, high value tieback opportunities."

The Phase 3 Silvertip project reinforces Shell's long-term commitment to the United States, in particular to the Gulf of Mexico, where production is essential to ensuring a reliable and secure supply of energy. Additionally, production in the US Gulf of Mexico has among the lowest greenhouse gas (GHG) intensity in the world for producing oil.

Notes to editors

• Perdido is a production spar in the US Gulf of Mexico, located within Alaminos Canyon, approximately 200 miles offshore south of Galveston, Texas in about 8,000 feet of water.
• Shell is operator of the Perdido Regional Host (PRH) and has 35% Working Interest (WI), with Chevron U.S.A. Inc. holding 37.5% WI, 3C Perdido Holdings 26.5% and BP 1% WI.
• The development concept for Phase 3 Silvertip includes two wells, tied into existing subsea infrastructure.
• The reference to our U.S. Gulf of Mexico production having among the lowest GHG intensity in the world is a comparison among other IOGP oil-and gas-producing members.
• Current estimated recoverable resource volumes of Phase 3 Silvertip are 17 million boe. The estimate of resource volumes is currently classified as 2P under the Society of Petroleum Engineers' Resource Classification System.
• The estimated peak production and current estimated recoverable resources presented above are 100% total gross figures.
• The investment in Phase 3 Silvertip is expected to generate an internal rate of return (IRR) in excess of the hurdle rate for Shell's Upstream business.

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Forward-Looking Statements

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Shell's net carbon intensity

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Shell's net-Zero Emissions Target

Shell's operating plan, outlook and budgets are forecasted for a ten-year period and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next ten years. Accordingly, they reflect our Scope 1, Scope 2 and Net Carbon Intensity (NCI) targets over the next ten years. However, Shell's operating plans cannot reflect our 2050 net-zero emissions target and 2035 NCI target, as these targets are currently outside our planning period. In the future, as society moves towards net-zero emissions, we expect Shell's operating plans to reflect this movement. However, if society is not net zero in 2050, as of today, there would be significant risk that Shell may not meet this target.

Shell expects to publish its 2024 Energy Transition Strategy on March 14, 2024, which will include an update on Shell's energy transition strategy and set out Shell's climate targets and ambitions for the future.

Forward Looking Non-GAAP measures

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SOURCE Shell Offshore Inc.