Royal Dutch Shell’s newest oil-production vessel, named the Turritella, set sail from Singapore this week for the world’s deepest underwater oil field, located in the Gulf of Mexico. The ship is set to become the fourth ship to produce in the area, called the Lower Tertiary, which requires wells to be drilled in 9500 feet (2900 meters) of water. The ship is considered the world’s deepest floating, production, storage and offloading (FPSO) unit. The Lower Tertiary is among the world’s most difficult fields, with extremely high temperatures, pressure and deep-seated reservoirs. Shell calls the effort the “Stones Project.”
The project was signed-off on in 2013, when oil process were double what they are currently. The Houston Chronicle reports that Shell’s continuation of the project may be surprising to some, as low oil prices may push others to slow or scrap altogether major investment in the Lower Tertiary due to the costs of production. Energy research firm Wood Mackenzie estimates that a barrel of crude must be between $60 and $80 to provide profit from drilling in the Lower Tertiary. Currently, a barrel of West Texas Intermediate costs around $41.
Alternatively, if prices increase, investment in the area could expand production from the field substantially over the next decades. At higher prices, production in the field could double in a decade to 500,000 barrels of oil per day.
The project is expected to produce a peak of 50,000 barrels of oil per day during the first phase, which will give Shell the opportunity to examine the area’s prospects. Curtis Lohr, manager of the project, said that “this really gives us an opportunity to make a minimal investment and learn more about the reservoir.” The second and third phases of the project, including a second and third round of drilling, would take place after a few years of production and further analysis.