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Breaking News:

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Chevron Invests $12 Billion on Gulf of Mexico Expansion

Chevron Invests $12 Billion on Gulf of Mexico Expansion

As part of what Joe Gregory, the general manager of major capital projects at Chevron, calls “a significant part of the company's growth strategy,” Chevron is spending almost $12 billion on strategic investments in the Gulf of Mexico as it prepares to launch two deepwater platforms.

The Jack St. Malo and Big Foot platforms are both being constructed at the Kiewit Fabrication Yard in South Texas, and have been named after the oil fields where they will be put to work, with first oil production expected by sometime at the end of next year.

The Jack St. Malo platform will weigh around 75,000 tonnes, will be controlled by nearly 60 operational staff, and will be positioned in 7,000 feet of water. The Big Foot platform will be anchored in 5,000 feet of water above a field that is estimated to contain more than 200 million barrels of recoverable oil.

Related article: BP Hopes for Lower Fines, Claims Far Less Oil Spilled in the Gulf than Estimated

The Jack St Malo and Big Foot platforms
The Jack St Malo and Big Foot platforms being transported to the Kiewit Fabrication Yard. (Heavy Lift Specialist)

Gregory told CNBC that the combined output of the two new platforms will be in the region of 230,000 barrels a day.

The platforms will contain the latest deep-water technology, with Gregory explaining that focus will be “on trying to recover additional oil from the reservoirs,” as the more the company can extract from the fields, the better it is for the both the company and its shareholders, and the US.

CNBC report that Chevron has promised Wall Street that by 2017 it will boost its daily production to 3.3 million barrels of oil equivalent, from 2.6 million barrels a day produced in 2012. The push into the Gulf of Mexico is a vital part of its plan to increase production.

Related article: Ex-Halliburton Manager Faces Jail for Destroying Deepwater Horizon Evidence

Chevron assures that their rapid expansion into the Gulf of Mexico, and desire to quickly boost production, will not come at the cost of safety. The 2010 disaster in the Gulf of Mexico is still fairly fresh on everyone’s mind, and Chevron is being extra careful to not cause any such incident itself.

“We design the safety risk into the project. We look at the risk and avoidance we take of making sure we can fabricate safely. We look at the verification of the designs. Those are important to make sure this facility operates safely every day.”

Chevron is not the only oil major basing its future strategy on increased production from the Gulf of Mexico; Shell and Anadarko have also made strategic investments in the region. Analysts predict that the number of platforms could increase from 35 to nearly 60 by the end of 2015.

By. Charles Kennedy of Oilprice.com



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