Shell starts oil production from Gumusut-Kakap field

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KUALA LUMPUR: Sabah Shell Petroleum Co Ltd has started oil production from the Gumusut-Kakap floating platform off Sabah, located in waters up to 1,200m deep.

The Gumusut-Kakap field is Malaysia’s third deepwater field brought on-stream after Kikeh and Siakap-North Petai fields. It is expected to reach an annual peak oil production of around 135,000 barrels a day, once fully ramped up.

“The move into deepwater is a natural step that we have undertaken towards realising our priority to monetise, increase and maximise our resources and values while we continue to sustain and grow production,” said Petroliam Nasional Bhd (Petronas) president and group chief executive officer Tan Sri Shamsul Azhar Abbas in a statement yesterday.

“Shell is pleased to be able to play an active role in developing the nation’s deepwater resources and deepwater service industry, [as] deepwater resources are critical to Malaysia’s long-term energy security,” Shell Malaysia Ltd chairman Iain Lo said in a separate statement.

Lo said with the oil production now under way, work on the gas injection facilities is continuing with an expected start-up during 2015.

The Gumusut-Kakap project is a joint venture among Sabah Shell, which is the operator with a 33% stake, ConocoPhilips Sabah Ltd (33%), Petronas Carigali Sdn Bhd (20%) and Murphy Sabah Oil Co Ltd (14%).

Lo said the Gumusut-Kakap field is expected to contribute up to 25% of the country’s oil production.

“Gumusut-Kakap is our first deepwater development in Malaysia, and uses the best of Shell’s global technology and capabilities in deepwater. The field is one of a series of substantial deepwater start-ups this year, driving returns and growth for shareholders,” said Royal Dutch Shell plc upstream international director Andrew Brown in the statement.

Assembling the vast structure, whose four decks total nearly 40,000 sq m, involved the world’s heaviest onshore lift, and the project uses Shell Smart Fields Technology to carefully control production from the undersea wells to achieve greater efficiency.

Oil is transported to the Sabah Oil and Gas Terminal onshore at Kimanis, Malaysia via a 200km long pipeline.

This article first appeared in The Edge Financial Daily, on October 9, 2014.