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ChevronTexaco projects to add 850,000 bpd by 2009 ‘Big 5’ include Tahiti in Gulf, Nigeria’s deepwater Agbami field, four deepwater Angola fields, Caspian Sea fields and Greater Gorgon in Australia Ray Tyson Petroleum News Houston Correspondent
ChevronTexaco has unveiled an ambitious plan to add roughly 850,000 barrels of oil equivalent production per day over the next five years, an effort the major says will be anchored by “Big 5” development projects in Angola, Nigeria, Kazakhstan, Australia and the U.S. Gulf of Mexico.
On the Big 5 list is Tahiti, which ranks among the largest discoveries ever in deepwater Gulf of Mexico with a current but likely under estimated 400 to 500 million barrels of reserves. First production is expected in 2008, ChevronTexaco said Dec. 14 at the company’s annual analyst meeting in New York.
“We believe this has a very large resource base,” George Kirkland, a ChevronTexaco vice president, said, adding that the company now believes Tahiti development wells would each be capable of producing far more than the tested 15,000 barrels a day.
Located in about 4,000 feet of water, Tahiti will cost about $2.5 billion to develop and will include a truss spar production facility capable of processing 125,000 barrels of oil per day, said ChevronTexaco, which operates Tahiti with a 58 percent interest.
Tahiti will be developed from two sub-sea drill centers located near two appraisal wells, the company said. Production is expected to peak in 2009. Largest project Agbami in Nigeria However, the largest of the Big 5 is Nigeria’s deepwater Agbami field, said to contain 800 million barrels of recoverable oil. ChevronTexaco is operator with a 68 percent stake.
“This is a huge project for us and it will move the production needle,” Kirkland said. “It’s a huge geologic structure.”
Agbami, located 70 miles offshore in 4,800 feet of water, is scheduled to come on line in late 2007 and reach peak production of 250,000 barrels per day in 2008. The price tag: $4.5 billion.
ChevronTexaco’s third major deepwater project involves four fields in Angola. First production from Benguela and Belize is scheduled for the fourth quarter of 2005 and the first quarter of 2006. Lobito and Tomboco are expected to come on line in the third quarter of 2006.
Together, the four Angola fields, situated in more than 1,250 feet of water, are expected to average about 200,000 barrels per day at peak in 2009. ChevronTexaco holds a 31 percent interest in the project. Total development cost should reach $2.3 billion, the company said. Two Caspian fields could see production boosted In Kazakhstan’s portion of the oil-rich Caspian Sea, ChevronTexaco and its partners are looking to boost production from two fields, including the huge Tengiz accumulation, by injecting sour gas into the reservoirs.
The two-stage project, expected to cost $4 billion, is expected to increase field output from a current 280,000 barrels per day to 500,000 barrels per day by the second half of 2006. ChevronTexaco holds a 50 percent stake in the project.
“In the sour gas injection facility we use new technology to enable us to inject ultra high pressure sour gas into the reservoir,” Kirkland said. “We believe this will be the largest single train sour (gas) oil production unit in the world.”
The last of the Big 5 is the so-called Greater Gorgon Project in Australia, a $10 billion liquefied natural gas development that is expected to come on line in 2009-2010 producing about 10 million tons of LNG a year.
Upstream gas initially will be supplied from the two largest of 12 gas fields in the area, Gorgon and Jansz. The 12 fields contain an estimated 40 trillion cubic feet of reserves. ChevronTexaco’s interest in Gorgon and Jansz alone ranges from 50 to 57 percent. Projects will contribute some 350,000 bpd The Big 5 projects will contribute more than 350,000 barrels of oil equivalent per day over the next five years, with the remaining 500,000 barrels per day of anticipated future ChevronTexaco production coming from an array of other developments around the globe, including the Hamaca project in Venezuela and LNG and oil projects in Angola.
“These projects and their anticipated additions to our production and reserves over the coming years are critical … to our success,” Kirkland said.
ChevronTexaco Vice Chairman Peter Robertson said the major intends to increase production 3 percent a year over the next five years, an effort that would raise the company’s daily production rate to around 3 million barrels of oil equivalent per day from a year-end 2004 average of about 2.5 million bpd.
However, he said to maintain the company’s annual 3 percent growth target it must minimize natural production declines in core areas where it already operates.
“We have an intensive focus under way in both our North American and our overseas operations to improve the performance of our base business,” Robertson said, adding that ChevronTexaco expects to decrease its annual production decline rate by about 1.5 percent in 2006 and 2007. Capex up 18 percent Meanwhile, ChevronTexaco announced a $10 billion capital and exploratory spending program for 2005, an 18 percent increase from 2004.
About 74 percent of total capital spending, or $7.4 billion, is targeted for upstream investment in exploration, production and global gas-related projects, including $2.5 billion in the United States.
About $1.9 billion, or 19 percent of total spending, has been aside for ChevronTexaco’s downstream, or refining and marketing, operations while about $700 million will be spent on its chemicals, technology and power divisions.
“Our capital program continues to target our strategies to focus on high-return upstream growth projects, to commercialize our company’s large natural gas resource base and to enhance the financial returns in our downstream business,” said Dave O’Reilly, ChevronTexaco’s chairman and chief executive officer.
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