Chevron Corporation CVX has approved Gulf of Mexico’s (GoM) Anchor project. This final investment decision (FID) marks the industry’s first deepwater high-pressure development.
Located roughly 140 miles off the coast of Louisiana and 5,000 feet under water, this Anchor project is estimated to churn out 75,000 barrels of crude oil and 28 million cubic feet of natural gas per day while the recoverable reserves are likely to surpass 440 million barrels.
While Chevron is the chief operator of the project with 62.86% working interest, its co-owner TOTAL S.A., Inc. TOT holds 37.14% stake.
Stage one of the initial development of the project worth $5.7 billion will comprise seven-well subsea development and semi-submersible floating production units. The field is scheduled to come online in 2024.
Chevron Corporation Price
Chevron Corporation price | Chevron Corporation Quote
This FID strengthens Chevron’s commitment toward the deepwater asset class in GoM. The company’s executive vice president Jay Johnson stated that “we expect to continue creating value for shareholders by delivering stand-alone development projects and sub-sea tie backs at a competitive cost.”
Notably, Chevron is one of the biggest leaseholders in the GoM. In 2018, the company’s net output from the region amounted to 186,000 barrels of crude oil per day, 105 million cubic feet of natural gas daily and 13,000 barrels of natural gas liquids each day.
For new projects in the GoM, this U.S. supermajor is taking measures like reducing its development costs on the back of standardizing equipment, utilizing fit-for-purpose surface facilities that require less capital and employing drill-to-fill strategies. The company further simplified the front-end engineering and design phase besides taking cues from better industry standards set in designs and equipment to lower costs while retaining its operating efficiency at the same time.
Last year, this San Ramon-based oil giant announced commencing production from its Big Foot deepwater project in the U.S. Gulf of Mexico. The field, first brought to light in 2006, has a capacity of 75,000 barrels of crude oil and 25 million cubic feet of natural gas a day. The production site, at a water depth of around 1,584 meters, is located 360 kilometers south of New Orleans. The Big Foot field has an estimated production life of 35 years.
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