Shell starts up new facility in UK North Sea, restoring production from the Penguins field

Shell has restarted production at the Penguins field in the UK North Sea with a modern floating, production, storage and offloading (FPSO) facility (Shell 50%, operator; NEO Energy 50%). The previous export route for this field was via the Brent Charlie platform, which ceased production in 2021 and is being decommissioned.

Peak production is estimated at around 45,000 barrels of oil equivalent per day (boe/d) and currently has an estimated discovered recoverable resource volume of approximately 100 million boe. Although primarily oil production, Penguins will also produce enough gas to heat around 700,000 UK homes per year.

The new FPSO will have around 30% lower operational emissions compared with Brent Charlie and is expected to extend the life of this important field by up to 20 years.

“Today, the UK relies on imports to meet much of its demand for oil and gas,” said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director. “The Penguins field is a source of the secure domestic energy production people need today, and the FPSO is a demonstration of our investment in competitive projects that create more value with less emissions.”

Although oil will be transported by tanker to refineries outside of the UK, these include ones that supply refined products like petrol and diesel back to the UK because of its limited refining capacity.

Natural gas will be transported through the existing pipeline to the St Fergus gas terminal in the north-east of Scotland, which supplies the UK’s national gas network.

The redevelopment of the Penguins field has involved drilling additional wells, which are tied back to the new FPSO. The field is in 165 metres (541 feet) of water depth, around 150 miles north-east of the Shetland Islands. Discovered in 1974, the field previously produced oil and gas between 2003 and 2021.

• The Penguins FPSO is operated by Shell U.K. Limited, which is a subsidiary of Shell plc. As announced on December 5 2024, Shell U.K. Limited and Equinor UK Ltd are to combine their UK offshore oil and gas assets and expertise to form a new company which will be the UK North Sea’s biggest independent producer. On deal completion, the new independent producer will be jointly owned by Equinor (50%) and Shell (50%). The joint venture will take on Shell’s equity interests in Penguins.
• The Penguins FPSO was built by Sevan – a technology, design and engineering company based in Norway – and is the first new Shell-operated facility in the UK North Sea for over 20 years. It is a compact facility with a cylindrical hull design, providing more efficiency and flexibility. It has a flareless system, which recycles vapour back into the tanks and reduces emissions.
• According to the UK regulator, the North Sea Transition Authority, production of oil and gas has declined by 11% in the last year (Source: NSTA) and UK production is falling faster than demand (Source: DESNZ).
• The estimated peak production and current estimated recoverable resources presented above are 100% total gross figures.
• Current estimated discovered recoverable resource volumes of this development are approximately 100 million boe. The estimate of resource volumes is currently classified as 2P (the sum of proved reserves plus probable reserves) and 2C (the best estimate scenario of contingent resources) under the Society of Petroleum Engineers’ Resource Classification System.
• On Shell’s Capital Market Day in 2023, Shell committed to deliver upstream and integrated gas projects coming on stream between 2023 to 2025 with a total peak production of greater than 500,000 barrels of oil equivalent per day. Penguins is expected to contribute to this commitment.
• Our target is to become a net-zero emissions energy business by 2050. By the end of 2023, we had achieved more than 60% of our target to halve emissions from our operations (Scopes 1 and 2) by 2030, compared with 2016.

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