However it should be noted that the discovery, is nowhere near the size of the deep-water oil fields that Shell uncovered in that region two decades ago.
But its location near existing infrastructure make it encouraging for an industry that has had to rein in exploration spending and project costs as oil prices continue to languish.
A 100-million-barrel find “is not a game-changer in the Shell portfolio,” said a senior director at IHS Energy. “But this discovery is completely consistent with what Shell is trying to do from its streamlined exploration program. If you can deliver 100 million barrels of crude oil and have all the infrastructure built, that should be a pretty high value, quick lead-time buyback development.”
If Shell decides to develop the Kaikias discovery, it would help refuel production facilities that have seen recent output decline. The three facilities there have a combined output capacity of about 500,000 barrels a day.
“It’s a beautiful discovery with good-quality oil in a good-quality reservoir,” said Martijn Dekker, Shell’s vice president for appraisal and hydrocarbon maturation.
“There’s a lot of concern in the industry on generally how we’re going to deal with lower prices, and the way to address that is to reduce our break-even price and reducing our cost basis,” he said.