Royal Dutch Shell PLC said on May 23 that its subsidiary Shell Offshore Inc. has started production at the Appomattox floating production system in the Gulf of Mexico, months ahead of schedule. Shell is the operator of the project.

Appomattox has an expected production of 175,000 barrels of oil equivalent per day and is the first commercial discovery brought into production in the Gulf of Mexico Norphlet formation, according to a Shell news release.

Shell said the project's costs were reduced by more than 40% since the final investment decision in 2015.

"That Appomattox was safely brought online ahead of schedule and far under budget is a testament to our ongoing commitment to drive down costs through efficiency improvements during execution," Royal Dutch Shell Upstream Director Andy Brown said in the release.

The floating production system is about 80 miles southeast of Louisiana, in approximately 7,400 feet of water.

The produced crude oil will be moved from Appomattox through the Mattox Pipeline Co. LLC system to the Proteus pipeline system and then onshore. Mattox, which has a capacity of 300,000 barrels per day, is jointly owned by Shell GOM Pipeline Company LLC and CNOOC Ltd. subsidiary CNOOC Petroleum Sales USA Inc.

Appomattox is a joint venture between Shell with a 79% stake and CNOOC Ltd. subsidiary CNOOC Petroleum Offshore SA Inc. with a 21% interest.