The headline
Shell Offshore Inc. started production at Phase 3 of the Silvertip field on 28 October 2026, tying two new wells in the Silvertip Frio reservoir back into existing subsea infrastructure at the Shell-operated Perdido spar in the Alaminos Canyon area of the deepwater US Gulf. Expected peak output is up to 6,000 boe/d gross. The gross recoverable resource estimate is 17 million boe (2P).
The project was sanctioned on 12 December 2024 against a 2026 first-production target, so the timeline held. As Shell USA president and EVP Gulf of America Colette Hirstius framed it, the value case rests on "adding new production through existing Perdido infrastructure" to "optimize the life of a world-class asset."
That is the whole thesis: incremental barrels through a sunk-cost hub, not a new facility. What follows is what that means commercially and technically — and where the public record goes quiet.
Two ownership layers, deliberately different
A feature of Silvertip Phase 3 that is easy to misread is that the wells and the host have different equity splits.
| Asset | Shell | Chevron | Other |
|---|---|---|---|
| Silvertip wells (Phase 3) | 40% (operator) | 60% | — |
| Perdido Regional Host (PRH) | 35% (operator) | 37.5% | 3C Perdido Holdings 26.5%; BP 1% |
Chevron holds the majority of the Silvertip wells but a minority of the host. The host position has also shifted since the 2006 sanction, when Perdido was Shell 35% / Chevron 37.5% / BP 27.5%; the 26.5% "3C Perdido Holdings" interest evidently succeeded most of BP's original share, with BP retaining 1%. This is a tariffed host arrangement rather than a unitised asset, and it matters for how throughput economics are shared among the partners. (The BP-to-3C succession is my inference from the two ownership tables, not a stated transaction.)
The procurement picture: one disclosed award, and it is already delivered
This is an operating project, not an opportunity. The primary subsea construction package was awarded and executed before first oil, and there is no evidence of an open steel package.
Subsea7 won the engineering, procurement, construction and installation (EPCI) contract from Shell Offshore on 13 December 2024 — the day after FID. Scope covered a new production flowline and related subsea infrastructure plus tie-ins to existing infrastructure. Engineering began immediately in Subsea7's Houston office, with offshore work scheduled for 2026. Subsea7 classified the award as "sizeable", which under its own convention means US$50 million–US$150 million. That is a contract-size band, not a disclosed price.
| Item | Status | Evidence |
|---|---|---|
| Flowline and tie-in EPCI | Awarded to Subsea7, Dec 2024; offshore campaign 2026 | Subsea7 / GlobeNewswire announcement; Offshore Magazine |
| Subsea trees, wellheads, manifolds, controls | No discrete public award located | — |
| Topside structural modification at Perdido spar | None publicly identified | — |
Two cautions. First, the absence of a published subsea-equipment award is a gap in disclosure, not proof that none exists — Shell routinely executes such scopes under frame agreements without a press release. Second, comparing with the field's own history is instructive: Perdido Phase 2 (2019) went to TechnipFMC as an integrated EPCI covering subsea equipment, flexible flowlines and jumpers, whereas Phase 3's disclosed scope is narrower, a flowline-and-tie-ins package. That narrowing is consistent with a genuinely brownfield, reuse-heavy design — but it is an inference from contract language, not a confirmed scope boundary.
Steel: real, but small and already placed
The steel content here is modest and was procured inside the Subsea7 EPCI award. Phase 3 is a single new production flowline with tie-ins and spools. The earlier Silvertip development (2018) used a McDermott scope comprising a flexible flowline, an umbilical and four electrical flying leads, which makes a flexible line the likeliest analogue for Phase 3 — an estimate, not a confirmed fact.
Critically, no public figure has been located for flowline length, diameter, wall thickness, line pipe grade, coating, or rigid-versus-flexible specification. Any supplier sizing off this project should treat those parameters as unknown. If the line is flexible, the steel content is confined to end fittings, armour wire and spools rather than line pipe; if rigid, the tonnage would be measured in the low thousands at most given the short tieback distances typical of a hub infill. Nothing in the record supports a larger claim.
For steel suppliers and fabricators, the honest reading is that this project's procurement is complete and its tonnage immaterial at the mill level. The more relevant steel signal in the Perdido corridor is structural: the spar itself, a deep-draft production unit moored in roughly 8,000 ft (about 2,440 m) of water, remains the fixed asset that keeps generating repeat tieback work — and repeat demand for spools, jumpers, suction piles and subsea hardware — as satellites like Silvertip are drained. Whether any further Perdido infill is sanctioned is not evidenced in the public record; any such expectation is speculative.
Why it matters beyond the barrels
- Hub-and-spoke discipline is back in favour. A 17 million boe, 6,000 boe/d tieback sanctioned and delivered in under two years on a sub-$150 million construction scope is the template majors are applying across mature deepwater basins. Silvertip Phase 3 is a clean data point for how cheap incremental barrels can be when the host already exists.
- The Perdido corridor keeps earning its keep. Silvertip and Tobago (discovered 2004, first production 2010) have been producing into the Perdido spar for over fifteen years; Phase 3 extends that tail. Shell has separately been drilling a phased campaign in the adjacent Great White unit, and Reuters reported in May 2025 that one Great White well had started up while two others slipped toward year-end — a reminder that not every infill well lands on schedule. Phase 3's on-time start is therefore a better-than-average outcome in a corridor where the partner has had mixed timing.
- Chevron's position is worth noting. With 60% of the wells and 37.5% of the host, Chevron captures a disproportionate share of Phase 3 upside relative to its hub exposure — a quiet portfolio tilt toward low-capital infill in a basin where it otherwise has limited operated deepwater presence.
Bottom line
Silvertip Phase 3 is a small, efficiently executed brownfield tieback that is now producing. Its significance is less in 6,000 boe/d than in what it demonstrates: that the Perdido hub can still convert modest resource into fast, low-capital production, with a single EPCI contractor carrying the subsea construction risk. The procurement chapter is closed — the flowline package was awarded to Subsea7 in December 2024 and installed ahead of an October 2026 start-up. Anyone looking for steel volume here is looking in the wrong place; anyone tracking deepwater tieback economics should be paying attention.