Shell starts oil production at Cardamom field in Gulf of Mexico

Shell has started pumping oil and gas from its Cardamom field in the deepwater Gulf of Mexico, its second major startup in the region this year. The development is expected to produce up to 50,000 barrels of oil equivalent per day.

The Cardamom, located 225 miles southwest of New Orleans, sat undiscovered until 2010.

Shell said in a statement Monday (Sept. 8) that new seismic technology allowed the company to get a better picture of the oil and gas deposit, which sits under thick layers of salt rock more than four miles beneath the ocean floor.

The project is Shell's second major production startup in the Gulf of Mexico in 2014. The company continues to ramp up production at its Mars B development, which started flowing oil and gas in February.

In an interview with NOLA.com | The Times-Picayune, John Hollowell, executive vice president of deepwater operations for Shell in the Americas, said the Cardamom production is also a big moment for Shell employees in New Orleans.

Shell is piping oil and gas from the Cardamom development to its existing Auger platform, which has been producing oil and gas from Shell developments in the Gulf since 1994.

Hollowell said New Orleans employees handled the majority of the engineering, design and construction management work for the Auger platform, the company's first tension leg platform in the deepwater Gulf.

The platform was slated to be removed and scrapped as recently as 2008, but Hollowell said the Cardamom discovery continues to make the 20-year-old platform viable.

"It's a great deal of pride for our New Orleans office to see the Auger platform getting back to its peak capacity," Hollowell said. "It continues to be a workhouse in our deepwater portfolio."

The Auger platform's production capacity peaked at around 156,000 barrels per day in 1998. Its production increases to 130,000 barrels of oil equivalent per day with the addition of the Cardamom development.

The Cardamom is the Auger's seventh subsea development.

As the cost of recovering oil and gas in the deep waters of the Gulf of Mexico and across the world continues to grow, investors have put increasing pressure on oil and gas companies to peel back costs.

Some companies have focused on using the latest technology to search for oil and gas around existing offshore platforms and other infrastructure that may have been missed the first time around.

Hollowell said Shell is continuously looking for opportunities to leverage both technology and existing resources to boost oilfield production in addition to new development projects such as the Stones project, which is now under construction in the Gulf of Mexico.

He said the Cardamom development is an example of how that strategy can pay off.

"This is a neat story of how we leveraged advances in technology to discover fields in and around an existing platform," Hollowell said.