Supermajor Shell has made a final investment decision on its Phase 3 Silvertip project, which will deliver two wells to boost production at the Shell-operated Perdido spar in the US Gulf of Mexico (GOM).
The wells, located in the Silvertip Frio reservoir, are expected to collectively produce up to 6,000 BOED at peak rates. Current estimated recoverable resource volumes of Phase 3 Silvertip are 17 million BOE. First production is expected in 2026.
“This investment at Perdido is another example of our focus on high-margin, lower-carbon-intensity barrels,” said Rich Howe, Shell's executive vice president for deep water. "As the largest operator in the US 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.”
Silvertip Frio is in the Alaminos Canyon area of the GOM in around 3000 m of water. The find will be tied back to existing subsea infrastructure that feeds into the Perdido spar platform in Alaminos Canyon block 857. The spar is moored roughly 200 miles offshore south of Galveston, Texas, in about 2450 m of water.
Shell operates Silvertip Frio with a 40% working interest; Chevron holds the remaining 60% stake. Shell also operates Perdido spar with a 35% working interest. Partners in the facility include Chevron (37.5%), 3C Perdido Holdings (26.5%), and BP (1%).
Subsea7 announced on 13 December a sizable contract from Shell for the the engineering, procurement, construction, and installation of a production flowline and related subsea infrastructure at the Phase 3 Silvertip development. Project management and engineering will start immediately at Subsea7’s office in Houston, with offshore activities expected to begin in 2026. The contractor defines a sizable contract as one valued at between $50 million and $150 million.
Shell said that the Phase 3 Silvertip project reinforces its long-term commitment to the US, in particular to the GOM, calling the new production “essential to ensuring a reliable and secure supply of energy.” The operator added that production in the US GOM has among the lowest greenhouse-gas intensity in the world for producing oil.
