Kaikias Field, US Gulf of Mexico

Kaikias field is an operational deepwater project located in the Mars-Ursa basin in the US Gulf of Mexico.

The field is operated by Shell, which also holds 100% working interest in the asset.

The deep-water field was discovered in 2014 and the final investment decision (FID) on the project was taken in 2017.

The Kaikias project is planned to be developed in two phases. The first phase commenced production in May 2018, around one year ahead of schedule.

Ownership

Shell Offshore, a subsidiary of Shell, had 80% working interest in the Kaikias field. The remaining stake was with MOEX North America (MOEX), a wholly-owned subsidiary of Mitsui & Co.

In December 2023, Shell acquired the remaining 20% working interest in the field. Subject to federal regulatory approval, Shell will have a 100% working interest in the asset. The financial details of the deal were not disclosed.

Following the transaction, MOEX will be dissolved and liquidated, and will cease to be a designated consolidated subsidiary of Mitsui.

On the part of Shell, the deal is aligned with the company’s efforts to increase production in the Gulf of Mexico, where output has one of the lowest greenhouse gasses (GHG) intensity for scope 1 and 2 in the world.

Kaikias Field Location and Reserves

Shell discovered a new oil and gas reservoir at the Kaikias field in August 2014.

The field lies in MC-811 and MC-812 blocks in the Gulf of Mexico, approximately 210km (130 miles) from the Louisiana coast.

Water depth in the region is around 1,372m (4,500ft).

Appraisal activities proved more than 300 feet of net pay. Shell also drilled its longest well ever drilled at Kaikias at 34,500ft.

The offshore field was confirmed in November 2015.

According to Shell, the Kaikias deep-water field is estimated to contain approximately 100 million barrels of oil equivalent in recoverable resources.

Kaikias Project Development

The Kaikias project is planned to be developed in two phases.

The first phase implements a sub-sea tieback design which includes three wells with oil and gas transported to the nearby Shell-operated Ursa production hub via a single flowline.

At peak, the three wells will produce up to 40,000 barrels of oil equivalent per day.

Kaikias is designed as capital-efficient deep-water project that will include leveraging infrastructure already in place.

Shell also elected to redevelop the exploration and appraisal wells for production, reducing the need for new drilling activity.

In collaboration with its former Kaikias joint venture (JV) partner MOEX North America, a wholly owned subsidiary of Mitsui Oil Exploration, Shell achieved cost reductions by simplifying well design, using existing subsea and processing equipment at Ursa hub and via supply chain savings.

All top-side modifications were also carried out without disrupting production at Ursa.

According to Shell, the steps reduced the total cost of the project by around 50% compared to the initial estimate.

Contractors Involved

In March 2017, TechnipFMC was engaged by Shell for the delivery, integration, and installation of the subsea production system (SPS) and subsea riser, jumper and flowline (SURF) equipment for phase one of the Kaikias project.

Under the contract terms, TechnipFMC’s responsibilities included manufacturing, installing and integrating SPS and SURF equipment designed to improve project economics by optimising field production and minimising lead times.

The project work involved the first application of compact pipeline end manifold and horizontal connection system technologies with flexible jumpers for the project.

TechnipFMC also collaborated with Shell during the front-end planning and design for the project’s first phase to improve the overall cost and pace of development.

International law firm Willkie Farr & Gallagher advised Mitsui on the divestment of the Kaikias field stake to Shell.