Chevron will move forward with the massive Anchor project in the deepwater Gulf of Mexico that carries an initial development cost of $5.7 billion.
The California energy major authorized the Gulf’s next big platform project while describing it as the first-ever, high-pressure development in the deepwater Gulf. The Anchor project will drill wells at 5,000 feet of depth with the capability of handing pressures of 20,000 pounds per square inch. The high-pressure technology is expected to open up other avenues of growth within the Gulf, Chevron said.
“This decision reinforces Chevron’s commitment to the deepwater asset class,” said Jay Johnson, Chevron’s executive vice president for upstream. “We expect to continue creating value for shareholders by delivering stand-alone development projects and sub-sea tie backs at a competitive cost.”
Chevron and its minority partner on the project, the French energy major Total, said they have reduced the project costs by one-third from the last generation of deepwater Gulf developments by using standardization techniques and more to replicate existing designs and equipment requirements.
The Anchor field is located 140 miles off the coast of Louisiana in the Green Canyon area of the Gulf. The first stage of the Anchor development consists of building a semi-submersible floating production platform and drilling a seven wells. The project is expected to come online in 2024.
The Anchor project is designed to produce up to 75,000 barrels of crude oil and 28 million cubic feet of natural gas per day. The total potentially recoverable oil-equivalent resources for Anchor are estimated to exceed 440 million barrels.
Earlier this week, Chevron listed the Gulf of Mexico as its third-highest funding priority heading into 2020 after West Texas’ booming Permian Basin and the big Tengiz oilfield in Kazakhstan.
Chevron owns nearly 63 percent of the Anchor project while Total holds just more than 37 percent.
In an unrelated project, Total and Norway’s Equinor said they are proceeding with engineering and design work on developing their North Platte field in the deepwater Gulf that also would include building a new floating production platform. This could be the next big Gulf project after Anchor.
Other major Gulf projects under construction include BP’s Mad Dog Phase 2 development and Royal Dutch Shell’s Vito project.
This article first appeared on the Houston Chronicle – an Energy Voice content partner. For more from the Houston Chronicle click here.