Shell will relocate the headquarters of its Gulf of Mexico operations from its longtime home on Poydras Street to a new mid-rise building in the planned River District neighborhood, a move that will keep hundreds of high-paying jobs in New Orleans and add a major corporate tenant to the new development.

During a news conference Thursday, local officials from the London-based energy giant said they have leased a custom-designed Office building in the development upriver of the Ernest N. Morial Convention Center. When the building is completed in late 2024 or early 2025, Shell’s 800 local employees will relocate there from the Hancock Whitney Center, the skyscraper that has housed Shell’s local operations since 1972 and until recently was known as One Shell Square.

Though much of New Orleans’ energy industry has decamped for Houston over the years, Shell, which has its North American headquarters there, has remained a steadfast presence in the Crescent City. Agreeing to a 12-year lease in a building constructed to its specifications should quiet any worries about losing another major employer, and may help economic development officials as they try to lure other companies to the metro area.

“We have been an integral part of the community and the working coast…and we are committing to stay here with a new building,” said Colette Hirstius, Shell’s Senior Vice President for the Gulf of Mexico.

The announcement also marks the first time in decades that a new office building will be constructed in downtown New Orleans, and suggests that the River District could fulfill its developers’ vision for a neighborhood of businesses, residents, retailers and entertainment venues, as opposed to an area devoted to cruise ship passengers and conventioneers.

The nascent development is a joint venture between Lauricella Land Company and Dallas-based Cypress Equities in partnership with the convention center, which owns most of the 40 acres along the Mississippi River. The concept, in the works for more than a decade, finally saw progress over the past two years as the convention center board chose a developer and inked a deal.

“Shell, with its rich history in Louisiana, is just the type of anchor commercial tenant we had hoped for,” said Cypress Equities CEO Chris Maguire in a prepared statement.

Looking for a new home

Shell has been a major corporate presence in New Orleans for decades, though it is smaller than at its peak. Still, while most of the other energy companies that once had a sizable presence in the city relocated after Hurricane Katrina, Shell has maintained a significant footprint. It runs its Gulf of Mexico operations from the local office, which make up about 50% of Shell’s U.S. oil production and 20% of its global earnings. 

It continues to employ about 3,000 workers in the state, including 800 at the Hancock Whitney Center, where it leases several floors.

In 2020, with a long-term lease in the building set to expire in 2025, the company began looking at options for new space, including relocating to Houston or to an existing office building elsewhere in New Orleans.

“This was a remarkable building in 1972 and it still is but the needs have changed,” said Hirstius. “We need a more collaborative workforce. We need much larger collaborative environments and we enjoy being outside. The River District suited all of our needs in the best way.”

Shell’s new home will be about one-tenth the size of the 51-story high-rise but will better suit the company’s current workforce, with fewer small offices, fewer walls and larger common areas for shared work space.

It’s not clear who will take over the space in the Hancock Whitney Center, which has seen other energy industry tenants depart in recent years. Moreover, adding tenants to the River District won’t be much salve to landlords and business owners in the Central Business District, which has seen a decline in commercial tenants since the pandemic.

‘Our building’

Hirstius couldn’t say whether the company will pay for naming rights to its new local offices, “but it will be our building,” she said.

“Everything about it will be our design and we are the main tenant,” said Hirstius.

In a prepared statement, the developers said Shell will occupy 120,000 square feet of the 142,000-square-foot building.

It is unclear how much the building will cost to construct, though experts say the cost per square foot for the construction of new mid-rise office buildings in this market could average $300 per square foot, or more than $42.5 million for the building.

This is a developing story. Please check back for updates.