Shell offers engineering contract to Subsea 7 for Penguins Project

Royal Dutch Shell PLC, a renowned oil & gas firm, has offered Subsea 7 S.A., a UK based engineering, construction, and services firm, a contract for the redevelopment of its Penguins oil & gas field located in the North Sea. Reportedly, the deal covers installation, engineering, procurement, and construction for flow & control systems including fabrication of subsea tie-ins, dynamic umbilical riser system, and 9-km & 16-in gas-export pipeline.

Subsea has announced that the project management and engineering activities will commence instantly in Aberdeen, with support from a technical pipeline group. If sources are to be believed, the contract amount is between GBP 35 million to GBP 110 million. However, Subsea is not expected to generate new jobs through this deal.

Reliable reports cite that North Sea operators are likely to make a commitment for developing nearly 12 to 16 new fields this year. Supply chain organizations are optimistic about the move and confident of generating huge ROI after a relatively long dry spell.

Subsea 7 claimed that the offshore activities will commence in 2020 and 2021. Jonathan Tame, VP, Subsea 7 UK & Canada, has emphasized that the deal affirms Shell’s faith in Subsea’s value-added solutions. He further clarified that the firm will continue its old partnership with Shell across the northern North Sea that had been in existence since 1984.

Steve Phimister, VP for upstream, Shell UK & Ireland, has declared optimistically that the construction phase of the project will generate employment for nearly 300 to 400 people in the UK. For the record, the project comprises Royal Shell’s initial manned installation across the North Sea after nearly 30 years.

Reports have revealed that Penguins cluster was first developed in 2002 and manufactures oil & gas through the old Brent Charlie platform with circular FPSO vessel. With the maturing Charlie platform projected to retire within a few years, Shell will require another tool for manufacturing oil & natural gas from Penguins.