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Chevron, Kerr-McGee Begin Blind Faith Development in Deepwater Gulf

Chevron Corp. and partner Kerr-McGee Corp. are ramping up development of the Blind Faith field in the deepwater Gulf of Mexico using a semisubmersible production facility. The field has an estimated gross resource potential of more than 100 million boe, and initial production is expected to be 30,000 bbl/d of oil and 30 MMcf/d of natural gas.

Chevron is the operator and holds a 62.5% working interest while Kerr-McGee holds a 37.5% stake. Total capital costs will be $900 million, and first production is expected in the first half of 2008, Chevron said.

Blind Faith is located in 7,000 feet of water, about 160 miles southeast of New Orleans, on Mississippi Canyon blocks 695 and 696. The discovery well was drilled in June 2001 and encountered more than 200 feet of net pay in Miocene sands at depths of 20,900-24,300 feet. A successful appraisal well was drilled in 2004.

"Blind Faith is part of our upstream strategy to grow profitability in our core areas and build new legacy positions," said Ray Wilcox, Chevron's North America Exploration and Production Co. president. "This project is a key asset in our deepwater portfolio and is expected to provide significant new oil and gas resources in the Gulf of Mexico."

The semisubmersible facility will have a production capacity of 45,000 bbl/d and 45 MMcf/d. The topsides can be upgraded to a capacity of 60,000 bbl/d and 150 MMcf/d to accommodate production from satellite discoveries or third-party tiebacks.

In related news, Williams said Thursday it agreed to transport oil and natural gas for the life of the leases in the Blind Faith field. Under the agreements, Chevron and Kerr-McGee dedicated to Williams the transport of production from their current and future ownership in the area surrounding the Blind Faith discovery.

To accommodate production from the Blind Faith acreage and the surrounding blocks, Williams agreed to extend its Canyon Chief and Mountaineer pipelines. Both of these pipelines were placed in service in May 2004 to support production from the Devils Tower Field at Mississippi Canyon block 773. Williams expects to have the extensions ready for service by mid-2007. The $177 million project will include a 37-mile extension of each pipeline.

The agreement also creates opportunities for Williams to move natural gas from the Blind Faith discovery through its Mobile Bay, AL processing plant and its Transco and Gulfstream interstate pipeline systems. Recovered natural gas liquids from Blind Faith also could be fractionated at Williams' facilities in Baton Rouge or Paradis, LA, the company said.

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