Royal Dutch Shell announced plans on Monday to develop a new oilfield in the Gulf of Mexico, its first major project to get the go-ahead since a Dutch court ordered the energy company to accelerate its carbon emissions reduction targets.
The Whale development, operated by Shell which owns 60% of the project, alongside Chevron with 40%, is expected to reach peak production of around 100,000 barrels of oil equivalent per day, Shell said in a statement.
Whale, which was discovered in 2017, holds a recoverable resource of 490 million barrels of oil equivalent and is scheduled to begin production in 2024.
Gas Emissions Reduction
In May, a court in The Hague ordered Shell to accelerate its energy transition plans and reduce greenhouse gas emissions by 45% by 2030, significantly faster than its current plan. Such cuts would mean shrinking its oil and gas business.
Shell said it will seek ways to accelerate its energy transition strategy and deepen carbon emission cuts, although it plans to appeal against the landmark ruling.
The deep-water Whale project will use a similar platform to an existing nearby Shell field, Vito, which is expected to reduce the development time and costs, Wael Sawan, Shell's head of oil and gas production, or uptream, said in a statement.
Shell said on Monday that its "energy transition plan includes increasing investment in lower carbon energy solutions, while continuing to pursue the most energy-efficient and highest-return upstream investments."
Shell said it anticipates Whale will deliver an internal rate of return of over 25%, significantly higher than the sector's average of 10% to 15%.