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Chevron’s Jack/St. Malo Project Underway in Lower Tertiary

Natural gas and oil production has started up from the Jack/St. Malo fields from one of the largest production facilities ever designed for the deepwater Gulf of Mexico (GOM), with total production by 2020 forecast to reach 21 MMcf/d of natural gas and 94,000 b/d of crude oil.

Production from the first development stage should hit capacity within five years, according to operator Chevron Corp. The dual-field facility in Walker Ridge (WR) has production capacity of up to 42 MMcf/d and 170,000 b/d -- and the potential for expansion. Based on current technology, close to 500 million boe could be recovered from the two fields over their 30-year life span.

"The Jack/St. Malo project delivers valuable new production and supports our plan to reach 3.1 million boe/d by 2017," said Chevron upstream chief George Kirkland.

The fields, touted since their discovery more than 10 years ago, are within 25 miles of each other in about 7,000 feet (2,100 meters) of water, 280 miles south of New Orleans. St. Malo was discovered in 2003 and Jack was discovered a year later, with a successful, extended drill stem test completed in 2006 (see Daily GPISept. 13, 2006). The first production well in St. Malo, PS003, last year exceeded 13,000 b/d (see Daily GPIMarch 1, 2013).

Based on the one well test in the St. Malo field, Chevron's average net oil production in the GOM could swell. In 2009, Chevron's GOM projects produced an average 149,000 b/d of crude oil, with 484 MMcf/d of gas.

Chevron subsidiaries own a half-stake in Jack, and majority stakes in St. Malo and the production facility. The dual-field development was sanctioned in 2010 (see Daily GPIOct. 22, 2010).

"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 Jay Johnson, upstream senior vice president. "These learnings can now be transferred to other deepwater projects in our portfolio."

The Jack/St. Malo project is unique in that it used groundbreaking technology, including the industry's largest seafloor boosting system and Chevron's first application of deepwater ocean bottom node seismic technology in the GOM, providing images of subsurface layers nearly 30,000 feet below the ocean floor.

Successive development phases, which could employ even more advanced recovery technologies, may enable substantially increased recovery, Chevron said. The fields were co-developed with subsea completions flowing back to a single host, semi-submersible floating production unit located between the fields.

"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 10-year period," said Jeff Shellebarger, president of Chevron North America Exploration and Production Co.

Crude oil from the facility is to be transported about 140 miles to the Green Canyon 19 platform via the Jack/St. Malo Oil Export Pipeline and onto refineries along the Gulf Coast. The oil pipeline, the first large-diameter, ultra-deepwater pipeline in the WR area of the Lower Tertiary, set new milestones for the GOM on a combination of extreme water depths, large diameter, high-pressure design and pipeline structures, Chevron said.

To carry natural gas from the region, Enbridge Inc. agreed in 2009 to expand its central GOM offshore system (see Daily GPIJuly 30, 2009). The Walker Ridge Gathering System, which started up in October, is able to carry up to 120 MMcf/d. The 10- and eight-inch diameter pipeline runs 170 miles with bidirectional points at Jack/St. Malo (WR 718), and from other nearby fields, Ship Shoal 332A, Big Foot (WR 29) and Stones (WR 508).

Jack co-owners Statoil ASA and Maersk Oil each hold a 25% stake. Chevron subsidiaries Chevron U.S.A. Inc. and Union Oil Company of California hold a 51% working interest in St. Malo with co-owners Petroleo Brasilerio/Petrobras (25%), Statoil (21.5%), ExxonMobil Corp. (1.25%) and Eni SpA (1.25%). Chevron has a 40.6% stake in the host facility with co-owners Statoil (27.9%), Petrobras (15%), Maersk (5%), ExxonMobil (10.75%) and Eni (0.75%).

The announcement Tuesday is the third in less than three months regarding the start-up or sanctioning of a deepwater GOM project in which Chevron is participating. Last month, Hess Corp.'s Tubular Bells facility started up; Chevron is joint partner with 42.86% (see Daily GPINov. 18). The Hess-operated Stampede project, in which Chevron has a 25% stake, was sanctioned in October (see Daily GPIOct. 30).

Jack/St. Malo is one of several big developments in the deepwater GOM, which together should drive a new peak of 1.9 million boe/d in 2016, according to Wood Mackenzie (see Daily GPINov. 13). Production from 2014 to 2016 in the deepwater GOM is forecast to increase by 18%/year.

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