Big Oil companies Chevron Corp. and Total SA have agreed to partner to explore seven prospects covering 16 blocks in U.S. deepwater of the Gulf of Mexico (GOM).
Total E&P USA Inc. would prospect in two of Chevron U.S.A. Inc.’s most promising plays, the Wilcox in the Central GOM, which is next to Chevron’s Anchor discovery, and Norphlet in the Eastern GOM near the Appomattox discovery.
Total’s participation in the wells would be between 25% and 40%. The first wells were spudded late July on the Ballymore prospect in Mississippi Canyon.
“This agreement, together with the recently announced participation in the Jack field as part of the Maersk Oil acquisition, increases Total’s footprint in the U.S.A. GOM, where it can apply its exploration expertise and deepwater technologies,” said Total’s Arnaud Breuillac, president of exploration and production (E&P).
Total has a one-third stake in the deepwater Chinook field and a 17% interest in the Tahiti field. It also is involved in an exploration campaign with Cobalt International Energy Inc. that led to a discovery on North Platte, in which it has a 40% interest.
The Maersk deal expanded Total’s GOM deepwater portfolio on prospects that align with Chevron prospects in the Lower Tertiary Trend, including a half-interest in the Cascade facility and a 25% stake in the Jack and St. Malo projects. All of the developments are in the Walker Ridge blocks offshore Louisiana.
“Total values Chevron’s performance as a GOM deepwater company, and this agreement expands a successful co-ownership already in place on the Tahiti field,” Breuillac said. Total also won six offshore exploration licenses in the August lease sale held by the Bureau of Ocean Energy Management.
Total has been active in U.S. E&P since 1957. In the onshore, Total owns and operates 100% of the former Chesapeake Energy Corp. properties in the Barnett Shale and is a 25% participant in the Utica Shale field.
“Total is sharpening its long-term focus by increasing its exposure to deepwater exploration and renewables,” said Wood Mackenzie’s Valentina Kretzschmar, who directs corporate analysis. The exploration partnership with Chevron “is an indication that Total's appetite for exploration is coming back...The new Chevron partnership could revitalize Total’s portfolio in the GOM.”
Total’s recent acquisition of Maersk “ticked many boxes, but it did not address Total’s long-term growth challenge. We expect Total to focus on accessing long-life, low-cost resources, while continuing to high-grade its portfolio,” Kretzschmar said.
“Mergers and acquisitions, discovered resource opportunities and exploration are all on the cards, supported by its strong financial position. Increasing exposure to gas and renewables will remain strategic priorities.”