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December 16, 2014
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Local officials and industry experts celebrate another victory in for deep-water drilling in the Gulf of Mexico as Chevron has begun harvesting in the Jack and St. Malo fields.
The Jack and St. Malo fields are among the largest areas in the gulf where large quantities of oil and gas exist and can be harvested.
Located within 25 miles of each other about 280 miles south of New Orleans in water depths of 7,000 feet, industry expert and former LSU Economics Department Chairman Dr. Loren Scott called drilling not only in deep water, but very deep into the ground into an area known as the Lower Tertiary, harder than landing a man on the moon.
“Seriously, the technology required to do what they’ve done is just off the charts,” Scott said. “You think about the weight. They’re using a drill chip to drill this. You think about the weight of the pipe stem that’s going down that far before it hits the bottom of the ocean then it goes down into the ground. It’s phenomenal”
New technological applications used in the $7.5 billion project include the industry’s largest seafloor pumping 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, according to Chevron Gulf of Mexico Vice President Michael Illanne.
“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,” said Upstream, Chevron Corporation senior vice president Jay Johnson in a release. “These learnings can now we transferred to other deep-water projects in our portfolio.”
The Jack and St. Malo fields were discovered in 2004 and 2003, respectively. Harvesting began last week, and Chevron anticipates production to ramp up over the next several years to a daily rate of 94,000 barrels of crude oil and 21 million cubic feet of natural gas. At maximum capacity, the facility will be able to harvest 170,000 barrels of oil and 42 million cubic feet of natural gas per day with the potential for expansion, according to Chevron.
To put that offshore potential in perspective compared to on-land fracking, Scott said the Bakken shale play in North Dakota – one of the most prolific shale plays – produces about 1,000 barrels of oil per day.
“It’s an amazing feat that they’re able to pull off, and it’s paying off, cause, as you can see, there are very nice
harvest rates out there,” Scott said.
Additionally, Scott said offshore wells don’t drop off in production like shale plays do. Chevron anticipates a production life 30 years and the recovery of 500 million oil-equivalent barrels in the Jack and St. Malo fields.
“Jack/St. Malo builds upon Chevron’s position as a top producer in the Gulf of Mexico and reinforces our commitment to production growth in the region and offshore Louisiana waters,” Illanne said in an email to The Times. “This project demonstrates Chevron’s world-class technology and project execution capability. We are excited about continuing our legacy of reliable and safe operation with one of the world’s premier deepwater installations.”
Illanne called the project an important part of Chevron’s worldwide goal of reaching 3.1 million barrels per day by 2017. Chevron produced 2.6 million barrels per day in 2013.
Maybe most importantly for this area, Chevron North Anerica Exploration and Production Company president Jeff Shelle-barger said in a release that the Jack and St. Malo projects “will continue to deliver sustained economic and community benefits, including job creating, along the Gulf Coast.”
That, of course, are exactly the kinds of things local governments like to hear.
“It continues to show the viability of the Gulf of Mexico,” said Terrebonne Parish President Michel Claudet. “Because of the fact that they have access to the Gulf through Port Fourchon, the service companies have generally been residing in Terrebonne Parish. That’s super news for us. It means continuing good times in Terrebonne.”
“Any time a company does business in south Louisiana, whether in Lafourche Parish or elsewhere, it is obviously of great benefit to everyone living here either directly or indirectly,” Lafourche Parish Administrator Archie Chaisson said in an email to The Times. “As all of us know, Port Fourchon is massively important to everyone in the United States because of the trade and commerce that can be directly tied back to it. It is no mystery that oil and gas companies like Chevron and others play a critical role in sustaining our local economy through means ranging from employment of local residents to the money they spend in our region as a result of them simply doing business here.”
Chevron has begun production in the Jack and St. Malo fields. The structure is located about 280 miles south of New Orleans.
