Shell Starts Production on New Deep Water Oil Well

Royal Dutch Shell has begun production of its deepwater Kaikias well about 100 miles off the coast of New Orleans. They originally were to begin initial production in 2019 but have reached production-ready status a year early.

The Kaikias development is in the Mars-Ursa basin and is owned jointly by Shell (80%) and MOEX North America LLC (20%). It's located in 4,500 feet of water and is drilled to a depth of 35,500 feet. For reference, the Deepwater Horizon was drilling at a water depth only 500 feet deeper, and it was only rated to drill at a depth of 30,000 feet.

Deep water oil exploration used to be cost-prohibitive, but the rising cost of fuel has made deeper drilling more profitable. The Kaikius well has an estimated peak production of 40,000 barrels per day, with a grand total of 100 million barrels of oil contained in the depths of the well. Shell believes that "accelerating production" in the region is a "prime example" of what Shell can do with their technical prowess.

Increased Production Needs to Be Balanced with Increased Caution

Whether in sea or on land, aggressive oil extraction and processing means thousands of new jobs—but it also means hundreds of new tragedies. Offshore drilling pays well and offers people a good living from working with their hands but often spells disasters for workers who are working on understaffed rigs or end up climbing into poorly-maintained helicopters. With 100 miles of travel between the shore and the rig and technology-pushing drill depths, increased activity needs to be balanced with increased safety precautions—especially since the Gulf Coast still hasn't recovered from the historic BP spill from less than a decade ago.