Chevron to Develop Oil Fields in Deeper Water Than Deepwater Horizon Rig
Here’s something that’s sure to get under environmentalists’ skin. Chevron announced yesterday that it plans to develop two Gulf of Mexico oil fields in waters that are significantly deeper than those surrounding the Deepwater Horizon oil rig, which exploded in April, dumping 4.9 million barrels of oil into the ocean over several months.
The announcement comes a little more than a week after the Obama administration announced that it is overturning the moratorium on deepwater drilling. Though environmentalists still have concerns with the practice, deepwater drilling stands to yield massive quantities of oil. The administration has established new deepwater drilling safety rules that companies must comply with before drilling.
The Jack and St. Malo oil fields are in about 7,000 feet of water, while the Deepwater Horizon oil rig was in about 5,000 feet of water. Chevron is investing $7.5 billion to develop the fields. The project is expected to start producing in 2014. Chevron says it can produce 170,000 barrels of oil and 42.5 million cubic feet of natural gas per day.
The oil fields are potentially very lucrative. Chevron says they have the capacity to produce 500 million barrels of oil.