Shell is buying a 51% stake in the North Platte development, in the US Gulf of Mexico, from Equinor, the Norwegian company has revealed.
TotalEnergies pulled out of the development in February this year, leaving the Norwegian company to go it alone. Equinor will keep a 49% stake but transfer the role of operator to Shell.
The two companies have agreed to rename the project as Sparta. This covers four blocks in the Garden Banks area, 275 km off Louisiana. Water depths on the area are around 1,300 metres.
Equinor and Total carried out a front-end engineering and design (FEED) study on the plan. Shell and Equinor will now review the plan and update it.
“Equinor has long-term view of Sparta as a high-quality project with a clear strategic fit for the company. Sparta will strengthen our position in the Gulf of Mexico as well as our overall role as a reliable energy supplier to the US,” says Chris Golden, Senior Vice President, US Upstream, Exploration and Production International.
Golden went on to say the Sparta project should add “significant value with lower carbon emissions intensity”.
The plan for the field development had involved the DS-11, owned by Valaris. Equinor cancelled the contract in early June, agreeing to an early termination fee.
Prices for drillships are heading upwards. Valaris reported that average dayrates in 2022 were $212,000, rising to $225,000 in 2023 and $301,000 in 2024.
Equinor and Total bought a 60% stake in the project in 2018, for $339 million. This deal increased Total’s stake from 40% to 60%, with Equinor taking the remaining 40%. The sale stemmed from the bankruptcy of Cobalt International Energy.
Cobalt drilled the discovery well on the project in 2012. Three wells have been drilled on the field, with numerous sidetracks.
Total said the high-pressure plan for North Platte involved eight subsea wells and two subsea drillings bases, connected to a floating production unit (FPU). It said oil production would peak at 75,000 barrels per day.