Chevron Corporation (NYSE: CVX) announced that crude oil and natural gas production has begun at the Jack/St. Malo project in the Lower Tertiary trend, deepwater U.S. Gulf of Mexico. Jack/St. Malo is a key part of Chevron's strong queue of upstream projects and was delivered on time and on budget.
The Jack and St. Malo fields are among the largest in the Gulf of Mexico. They were discovered in 2004 and 2003, respectively, and production from the first development stage is expected to ramp up over the next several years to a total daily rate of 94,000 barrels of crude oil and 21 million cubic feet of natural gas. With a planned production life of more than 30 years, current technologies are anticipated to recover in excess of 500 million oil-equivalent barrels. Successive development phases, which could employ enhanced recovery technologies, may enable substantially increased recovery at the fields.
"The Jack/St. Malo project delivers valuable new production and supports our plan to reach 3.1 million barrels per day by 2017," said George Kirkland, vice chairman and executive vice president, Upstream, Chevron Corporation.
"This milestone demonstrates Chevron's capital stewardship and technology capabilities, featuring a number of advances in technology that simply didn't exist when the fields were discovered," added Jay Johnson, senior vice president, Upstream, Chevron Corporation. "These learnings can now be transferred to other deepwater projects in our portfolio."
The Jack and St. Malo fields are located within 25 miles (40 km) of each other in approximately 7,000 feet (2,100 m) of water in the Walker Ridge area, approximately 280 miles (450 km) south of New Orleans, Louisiana.
The fields were co-developed with subsea completions flowing back to a single host, semi-submersible floating production unit located between the fields. The facility is the largest of its kind in the Gulf of Mexico and has a production capacity of 170,000 barrels of oil and 42 million cubic feet of natural gas per day, with the potential for future expansion.
"Jack/St. Malo is the result of the collaboration of hundreds of suppliers and contractors and many thousands of people across nine countries over a ten-year period," said Jeff Shellebarger, president, Chevron North America Exploration and Production Company. "This project highlights our long-term commitment to the U.S. Gulf of Mexico, where Chevron is among the top leaseholders. Moreover, we expect Jack/St. Malo will continue to deliver sustained economic and community benefits, including job creation, along the Gulf Coast."
Crude oil from the facility will be transported approximately 140 miles to the Green Canyon 19 Platform via the Jack/St. Malo Oil Export Pipeline, and then onto refineries along the Gulf Coast. The pipeline is the first large-diameter, ultra-deepwater pipeline in the Walker Ridge area of the Lower Tertiary trend.
The combination of extreme water depths, large diameter, high-pressure design, and pipeline structures have set new milestones for the Gulf of Mexico.
The project, which was sanctioned in 2010, has delivered new technology applications, including the industry's largest seafloor boosting system and Chevron's first application of deepwater ocean bottom node seismic technology in the Gulf of Mexico, providing images of subsurface layers nearly 30,000 feet below the ocean floor.
Chevron, through its subsidiary, Chevron U.S.A. Inc., has a working interest of 50 percent in the Jack field, with co-owners Statoil (25%) and Maersk Oil (25%). Chevron, through its subsidiaries, Chevron U.S.A. Inc. and Union Oil Company of California, also holds a 51 percent working interest in the St. Malo field, with co-owners Petrobras (25%), Statoil (21.5%), ExxonMobil (1.25%) and Eni (1.25%); and a 40.6 percent ownership interest in the host facility, with co-owners Statoil (27.9%), Petrobras (15%), Maersk Oil (5%), ExxonMobil (10.75%) and Eni (0.75%).