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Royal Dutch Shell’s (ticker: RDS.A) Shell Offshore Inc. finalized its investment decision for the deep-water development, Vito, located in the U.S. Gulf of Mexico.

The company said it estimates a forward-looking, breakeven price to be less than $35 per barrel.

Vito will be Shell’s 11th deep-water host in the Gulf of Mexico and it is currently scheduled to begin producing oil in 2021.

Shell Expects its Deepwater GOM Project Vito will Break Even at Sub-$35 Oil

According to Shell, Vito is expected to reach peak production of approximately 100,000 BOEPD. The development currently has an estimated recoverable resource of 300 MMBOE.


In 2015, Shell began to redesign the Vito project, reducing cost estimates by more than 70% from the original concept.

Shell said that Vito’s cost savings are due to the simplified design, in addition to working collaboratively with vendors in a variety of areas including well design and completions, subsea, contracting and topsides design.


Vito ownership is held by Shell Offshore Inc. (63.11% operator) and Statoil USA E&P Inc. (36.89%). The field is located beneath more than 4,000 feet of water, approximately 150-miles southeast of New Orleans.

Additional details provided by Shell

  • Vito is located over four blocks in the Mississippi Canyon area of the Gulf of Mexico, and the development will consist of eight subsea wells with deep (18,000 feet) in-well gas lift
  • The estimated peak production and current estimated recoverable resources are 100% total gross figures

Shell said the forward-looking breakeven price is calculated based-on all forward-looking costs associated from FID. According to Shell, this typically excludes exploration and appraisal costs, lease bonuses, exploration seismic and exploration team overhead costs.

The forward-looking breakeven price is calculated based on Shell’s estimate of resources volumes that are currently classified as 2p and 2c, under the Society of Petroleum Engineers’ Resource Classification System – this project is expected to be multi-decade producing, thus the less than $35 per barrel projection will not be reflected either in earnings or cash flow in the next five years.

Shell Expects its Deepwater GOM Project Vito will Break Even at Sub-$35 Oil

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