Shell has started first oil production from the next development phase of a deepwater oil project offshore Malaysia, the UK-based supermajor said on Friday as Europe’s largest oil and gas companies are pivoting back to strategies to boost output of fossil fuels.

Shell’s subsidiary Sabah Shell Petroleum Company Ltd, announced first oil production from Phase 4 of the Gumusut-Kakap-Geronggong-Jagus East deepwater offshore development project. The Phase 4 production is flowing to the existing Gumusut-Kakap Semi-submersible Floating Production System located off the coast of Sabah, offshore Malaysia, where SSPC is the operator.

The GKGJE Phase 4 development includes a subsea tie-back that straddles the Malaysia – Brunei border and involves the drilling of three producer wells and one water injection well. Located in water depths of 1,200 meters (3,937 ft), Gumusut-Kakap was the first deepwater project for Shell in Malaysia and began production in 2014.

The new development contributes towards Shell’s commitment to bring online new upstream projects between 2023 and 2025, which will deliver an additional combined 500,000 barrels of oil equivalent per day (boe/d) at peak production, the supermajor said.

So far this year, Shell has launched commercial production at the Whale field in the Gulf of Mexico, eyeing peak output levels of 100,000 barrels daily. Shell has also resumed oil and gas production from the Penguins field in the UK North Sea with a new floating, production, storage and offloading (FPSO) facility, replacing the previous export route via the Brent Charlie platform, which ceased production in 2021.

Shell was one of the first European majors to pivot back to oil and gas in a 2023 strategy to continue investing in oil and gas production and selectively pour capital into renewable energy solutions.

Shell’s CEO Wael Sawan has said that reducing global oil and gas production would be “dangerous and irresponsible” as the world still needs those hydrocarbons.

By Charles Kennedy for Oilprice.com

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