After a few years of relatively light activity in the Gulf of Mexico, Chevron said last week it is again looking at potential large new deepwater developments—two of them off the Louisiana coastline.
As S&P Global reports, Chevron has been focusing on shorter lead-time projects with a faster payback amid an industry downturn that began in late 2014 when U.S. oil prices, that had been hovering in the low $100 a barrel range, dropped to around $50 per barrel.
But it is now ready to take on a selected few projects requiring higher capital expenditures and potentially years to bring on stream. In the past few years, industry has learned how to lower the costs of those projects through phased designs, improved construction and better supply chain logistics.
One Chevron project of interest is the much-watched Anchor discovery, located in the Gulf’s Green Canyon area offshore Louisiana. As S&P Global reports, it’s a high-temperature, high-pressure field that requires some fancy technology to produce it. Industry produces ultra-deepwater wells typically at a limit of 15,000 pounds per square inch of pressure, but Anchor and a few other US Gulf discoveries are at the 20,000 psi level.
A final investment decision is slated for early next year.
In the early stages of evaluation is the Chevron-operated Ballymore, located offshore Louisiana’s “big toe” to determine resource sizes.
“We’re targeting unit development costs of $16/b to $20/b for the Gulf of Mexico,” Jay Johnson, Chevron’s executive vice president for upstream, said during the company’s second-quarter earnings conference call. S&P Global has the full story.