Chevron deploys sixth drillship in US GoM

OREANDA-NEWS. April 17, 2015. US major Chevron deployed its sixth drillship in the US Gulf of Mexico, aiming to maintain a steady pace of drilling in the region.

The 50pc plunge in crude prices since June has brought drilling and investment plans back into investor focus as companies sharply reduce capital expenditure (capex) plans. Along with Chevron, others such as ConocoPhillips and Anadarko are retaining their GoM focus even after sharply lowering their capex, betting on the longer-term economics there.

The Transocean Deepwater Asgard, capable of drilling to a depth of 35,000ft, will commence operations in the Mississippi Canyon area, Chevron said.

At least six new projects are expected to come online in the US GoM following several years of heavy spending, which is expected to increase output from the region by 23pc, according to consultancy Wood Mackenzie.

The six projects expected to come online this year would bring an additional 177,000 b/d of oil equivalent (boe/d) to the markets, increasing total output to 1.6mn boe/d. Capital expenditure (capex) in the region is expected to increases for a fifth year in a row to a record \\$14.9bn.

Among others, Chevron's Big Foot project, which is 94pc complete, is expected to start first production later this year. The facility, in which Chevron is the operator with a 60pc stake, has a design capacity of 75,000 b/d of crude and 25mn cf/d of gas.

The six new projects are in addition to Lucius, Jack/St Malo and Tubular Bells that started up in the past six months. Lucius is operated by Anadarko, Jack/St. Malo by Chevron and Tubular Bells by Hess.

In 2014, Chevron's net output in the Gulf of Mexico averaged 133,000 b/d of crude oil, 320mn cf/d of natural gas and 15,000 b/d of natural gas liquids (NGLs). As of early 2015, Chevron has an interest in 587 leases in the Gulf of Mexico, 386 of which are located in water depths greater than 1,000ft.