Penguins Field roars back to life: Shell's new North Sea facility boosts UK energy security

February 04, 2025 — Shell has announced the restart of production at the Penguins field in the UK North Sea, marking a significant boost to domestic energy supply. A new, state-of-the-art floating production, storage and offloading (FPSO) facility will now handle operations, replacing the aging Brent Charlie platform which ceased production in 2021.

The revamped field is projected to reach peak production of around 45,000 barrels of oil equivalent per day (boe/d) and holds an estimated 100 million boe in recoverable resources. While primarily an oil field, Penguins will also produce enough natural gas to heat approximately 700,000 UK homes annually.

North Sea oil reserves

The North Sea, a body of water separating Great Britain from continental Europe, has been a significant source of oil and gas for decades. While production has been declining in recent years, substantial reserves still remain, representing a valuable asset for the nations bordering it.

These reserves, though finite, play a crucial role in energy security and economic stability for countries like the UK and Norway. Ongoing exploration and technological advancements continue to refine estimates of recoverable resources, and while the focus is shifting towards renewable energy, North Sea oil and gas will likely continue to contribute to the energy mix for the foreseeable future.

The geological complexity of the North Sea presents both challenges and opportunities for extraction. Reserves are often found in challenging environments, requiring sophisticated drilling and production techniques. Furthermore, the aging infrastructure associated with older fields necessitates significant investment for continued operation.

However, advancements in subsea technology and enhanced recovery methods are opening up access to previously uneconomical reserves, potentially prolonging the lifespan of North Sea production. Balancing the economic benefits of these resources with the environmental considerations of fossil fuel extraction remains a key challenge for policymakers and energy companies.

Lower operational emissions

“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.”

The new FPSO boasts a 30% reduction in operational emissions compared to its predecessor and is expected to extend the field’s lifespan by up to 20 years. This development comes at a crucial time, as the North Sea Transition Authority reports an 11% decline in UK oil and gas production in the past year, with domestic output falling faster than demand.

Complex infrastructure

Oil from Penguins will be transported by tanker to refineries, some of which supply refined products like petrol and diesel back to the UK, addressing the nation’s limited refining capacity. Natural gas will be piped to the St Fergus gas terminal in northeast Scotland, feeding directly into the UK’s national gas network.

The Penguins redevelopment involved drilling new wells connected to the FPSO. Located 150 miles northeast of the Shetland Islands in 165 meters of water, the field was initially discovered in 1974 and produced oil and gas between 2003 and 2021.

The cylindrical FPSO, built by Norwegian company Sevan, is the first new Shell-operated facility in the UK North Sea in over 20 years. Its compact design offers increased efficiency and flexibility, and a flareless system recycles vapour back into the tanks, minimizing emissions.

Outlook

Looking ahead, Shell U.K. Limited and Equinor UK Ltd are set to combine their UK offshore oil and gas assets, forming the North Sea’s largest independent producer. This joint venture will take on Shell’s equity interests in Penguins upon completion of the deal.

The Penguins project contributes to Shell’s global commitment to bring upstream and integrated gas projects online between 2023 and 2025, targeting a combined peak production of over 500,000 boe/d. Shell has also pledged to become a net-zero emissions energy business by 2050 and reports achieving over 60% of its target to halve operational emissions by 2030.

The future of North Sea oil and gas is intertwined with the global energy transition. As nations strive to meet climate targets and reduce their reliance on fossil fuels, the role of North Sea reserves is expected to diminish. However, until renewable energy sources can fully meet energy demand, these resources will continue to play a vital role in bridging the gap. The focus is increasingly on responsible extraction, minimizing environmental impact, and maximizing the economic value of remaining reserves while simultaneously investing in and developing sustainable alternatives. The North Sea's legacy as a major hydrocarbon province will eventually give way to its potential as a hub for offshore wind and other renewable energy technologies.

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