Shell gives green light to develop giant Gulf of Mexico field

LONDON - Royal Dutch Shell has given the green light for the development of the Appomattox deepwater oil and gas field in the Gulf of Mexico, set to be the energy giant's largest floating platform in the region.

The Appomattox project, some 80 miles (130 km) off the coast of Louisiana, is expected to reach peak production of around 175,000 barrels of oil equivalent (boe) per day, Shell said in a statement on Wednesday.

Shell holds a 79 percent stake in the project while Nexen Petroleum, a wholly owned subsidiary of China's CNOOC, holds the remaining 21 percent.

Once online, the field could boost Shell's production in the region by more than 60 percent from 2014 levels. "We have again delivered a globally competitive investment scope for another significant deepwater project," said Marvin Odum, Shell Upstream Americas director.

"Appomattox opens up more production growth for us in the Gulf of Mexico, where our production last year averaged about 225,000 boe per day, and this development will be profitable for decades to come. With its competitive cost and design, Appomattox is next in our series of deepwater successes."

Shell said it had reduced the project's cost by 20 percent through design improvement and cost reductions, bringing its breakeven price to around $55 per barrel of oil equivalent.