Shell Offshore Inc., a subsidiary of Shell plc (Shell), has announced the Final Investment Decision (FID) for the Phase 3 Silvertip project, a strategic expansion aimed at enhancing production from the Shell-operated Perdido spar in the U.S. Gulf of Mexico (GoM).
This development underscores Shell’s commitment to advancing high-margin, low-carbon intensity energy projects while strengthening its foothold in the deepwater energy sector. Rich Howe, Shell’s Executive Vice President for Deep Water, emphasized the importance of the project.
“This investment at Perdido is another example of our focus on high-margin, lower carbon intensity barrels.
“As the largest operator in the U.S. Gulf of Mexico, we prioritize opportunities nearby our existing assets in these advantaged corridors, where we are well-positioned to develop shorter-cycle, high-value tieback opportunities.”
Rich Howe, Shell’s Executive Vice President for Deep Water
The Phase 3 Silvertip project involves drilling two new wells in the Silvertip Frio reservoir, where Shell holds a 40% working interest as operator, alongside Chevron U.S.A. Inc., which owns the remaining 60%.
The two wells are projected to collectively deliver up to 6,000 barrels of oil equivalent per day (boed) at peak production rates. The first output from these wells is anticipated in 2026, contributing to the sustained production capacity of the Perdido spar.
The project aligns with Shell’s overarching strategy of leveraging shorter development timelines and maximizing the value of existing infrastructure. By focusing on high-value tieback opportunities, Shell aims to enhance production efficiency while minimizing its environmental footprint.
The U.S. Gulf of Mexico is renowned for its low greenhouse gas (GHG) intensity in oil production, making it a critical component of Shell’s decarbonization roadmap.
The Phase 3 Silvertip project is part of a larger trend in the oil and gas industry toward optimizing existing assets and infrastructure.
By focusing on shorter-cycle developments, companies like Shell are adapting to a rapidly changing energy landscape that demands both efficiency and sustainability.
Shell’s role as the largest operator in the U.S. Gulf of Mexico positions it to lead the industry in developing innovative, lower-carbon solutions. With an extensive portfolio of deepwater assets, Shell remains committed to balancing energy security with environmental stewardship.
Strategic Importance for Shell and the Gulf of Mexico
The Perdido spar, a key asset in Shell’s deepwater portfolio, is located in the Alaminos Canyon, roughly 200 miles offshore from Galveston, Texas.
Positioned in water depths of approximately 8,000 feet, Perdido serves as a production hub for several fields in the region.
Shell operates the Perdido Regional Host (PRH) with a 35% working interest, while Chevron holds 37.5%, 3C Perdido Holdings owns 26.5%, and BP retains 1%.
“Phase 3 of the Silvertip project will tie the two new wells into the existing subsea infrastructure.
“This approach will not only reduce capital expenditure but also accelerates the timeline from development to production.”
Rich Howe, Shell’s Executive Vice President for Deep Water
The tieback design exemplifies the industry’s shift toward leveraging existing facilities to optimize resource extraction while minimizing environmental impacts.
Shell’s investment in the Silvertip project highlights its commitment to maintaining energy security in the United States.
As global energy markets face increasing volatility, projects like Silvertip play a vital role in ensuring a stable and reliable supply of energy.
With peak production expected at 6,000 boed, the new wells will contribute significantly to the U.S. energy mix.
The Gulf of Mexico remains a cornerstone of U.S. oil production, accounting for approximately 15% of the nation’s crude oil output.
Shell’s continued focus on the region reflects the strategic importance of deepwater production in meeting global energy demand while addressing climate-related challenges.
The Phase 3 Silvertip project represents a significant milestone for Shell Offshore Inc., reinforcing its long-term commitment to the U.S. Gulf of Mexico and its role as a leader in sustainable deepwater production.
Shell’s investment in the Gulf of Mexico exemplifies how the industry can navigate these challenges, ensuring both economic growth and environmental responsibility.
