Chevron Corp. on Thursday sanctioned the long-awaited Jack/St. Malo project, a promising project that it would operate in the Lower Tertiary trend in the deepwater Gulf of Mexico (GOM). When the project ramps up, which is anticipated in 2014, it is expected to produce up to 42.5 MMcf/d of gas and 170,000 b/d of oil.

The oil production alone would more than double Chevron's average net production in the GOM. In 2009 Chevron's GOM projects produced a total of 484 MMcf/d of gas, 149,000 b/d of crude oil and 14,000 b/d of natural gas liquids.

The Jack and St. Malo fields are estimated to contain more than 500 million boe of combined total recoverable resources. Seven exploration and appraisal wells have been "successfully and safely drilled" at these fields since 2003, Chevron said. Through its subsidiary Chevron U.S.A. Inc., the producer holds a half-stake in the Jack field, a 51% stake in the St. Malo field, and 50.67% interest in the planned host facility.

"Jack/St. Malo is the latest example of Chevron advancing its industry-leading queue of major capital projects," said Vice Chairman George Kirkland. "The Lower Tertiary is recognized as a huge resource with the potential for long life projects of up to 30 to 40 years and the opportunity to enhance recoveries through technology."

The Jack and St. Malo fields, which are about 280 miles south of New Orleans, are within 25 miles of each other in 7,000 feet of water. Initial development is expected to require an investment of $7.5 billion.

"The Jack/St. Malo project builds off our success in the U.S. Gulf of Mexico and will enable Chevron to help meet future U.S. energy demand while delivering a safe and reliable deepwater operation," said Gary Luquette, president, Chevron North America Exploration and Production Co.

The sanctioned development, said Luquette, "is another step in our efforts in the development of the Lower Tertiary trend. We have an operating interest in the 2009 Buckskin discovery and participate in the Perdido Regional Development, which provide significant learnings we can apply to Jack/St. Malo."

In September 2006 Chevron and its partners at the time, Devon Energy Corp. (25%) and Statoil ASA (25%) announced that they had completed the first successful production test on the Jack No. 2 well in the Walker Ridge Block 758 (see Daily GPI, Sept. 6, 2006). The tests at the time broke Chevron's 2004 Tahiti well test record in the deepwater GOM. Devon last year sold its quarter interest in the project to Denmark's Maersk Oil (see Daily GPI, Feb. 11; Dec. 23, 2009).

Earlier this year officials with Enbridge Offshore Pipelines said they had secured two ultra-deepwater developments in the GOM, including a $500 million Walker Ridge Gas Gathering System, which would process gas from the deepwater Jack, St. Malo and Big Foot fields (see Daily GPI, Feb. 4).

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