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Shell breaks water-depth record for subsea well

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THE ASSOCIATED PRESS 
December 2, 2008, 7:02PM ET

Shell Oil Co. said Tuesday it has set a world water-depth record by drilling and completing an oil well in 9,356 feet of water in the Gulf of Mexico.

The well is part of Shell’s Perdido Development project about 200 miles south of Houston. It easily topped the previous record for a completed oil well in 6,950 feet of water — also set by Shell in the Gulf of Mexico. Anadarko Petroleum Corp. has completed natural-gas wells in about 9,000 feet of water in the Gulf.

Production at Perdido is scheduled to begin around 2010. Shell says the project, which dates to a lease sale in 1996, will be capable of producing 130,000 barrels of oil equivalent a day.

Deepwater drilling in the Gulf dates to 1979 when Shell began production, but development really didn’t take off until the 1990s as technological advancements made it more feasible. Today most continental U.S. oil and gas production comes from the deepwater Gulf of Mexico, according to the U.S. Energy Department.

Shell’s new record-deep well is the latest indicator of how long it takes to bring ultra-deepwater projects to fruition and the ever-mounting exploration efforts oil companies are taking to find new sources of fossil fuels. Shell didn’t disclose Perdido’s costs, but such ventures can cost billions of dollars.

It took 10 years from the lease sale for Shell to evaluate the site and opt for commercial development; hydrocarbons were discovered there in 2002.

The U.S. Minerals Management Service, which oversees offshore drilling, said Tuesday that of the 68 rigs currently drilling in the Gulf of Mexico, 35 were in water deeper than 1,000 feet and 16 were in depths greater than 5,000 feet.

MMS spokeswoman Eileen Angelico said companies have drilled exploratory wells in depths greater than 10,000 feet, but none have proceeded to the point of being ready for production.

At Perdido, three fields named Great White, Tobago and Silvertip will be tied together by a spar platform moored in about 8,000 feet of water. Spars are huge structures consisting of a large cylinder that supports a drilling and production platform.

Instead of extending all the way to the seafloor, the cylinder is tethered to the bottom by cables and lines. Perdido is held in place by nine polyester mooring lines averaging more than 2 miles in length.

Shell said it plans to top the new record with a well at 9,627 feet in the Tobago field. It eventually plans to drill 35 wells from Perdido.

Oil and gas produced by the project will be transported to the Texas coast by 77 miles of oil export pipelines and 107 miles of gas export pipelines.

Shell, the U.S. arm of Royal Dutch Shell PLC, operates the platform and has a 35 percent stake in the project. Chevron Corp. owns 37.5 percent and BP PLC holds 27.5 percent.

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