By Sarah Kent
LONDON--Royal Dutch Shell PLC (RDSB.LN) is pressing ahead with
plans to develop its Appomattox deepwater project in the Gulf of
Mexico, despite the steep drop in oil prices over the last year
that has discouraged many companies from moving forward with
ambitious and expensive ventures.
The Anglo-Dutch oil giant said it had reduced the cost of the
project by 20% through design improvements, supply-chain savings
and reducing the number of wells required for development. It
estimates the break-even price for the Appomattox development at
$55 a barrel.
"We have again delivered a globally competitive investment scope
for another significant deepwater project," said Marvin Odum, Shell
upstream Americas director.
The company is targeting peak production equivalent to 175,000
barrels of oil a day, and expects the project to start up around
the end of the decade. The volumes build on Shell's current
production in the Gulf of Mexico, which averaged 225,000 barrels of
oil equivalent a day last year.
Write to Sarah Kent at sarah.kent@wsj.com
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