The Chevron Corp. logo sits on Chevron Plaza in Calgary, Alberta, Canada, on Wednesday, Aug. 14, 2013.Brent Lewin/Bloomberg
Undeterred by the worst slump in oil prices this decade, Chevron Corp. began pumping from a half-billion barrel deposit beneath the Gulf of Mexico more than 10 years after its discovery.
Crude and natural gas is flowing from the Jack and St. Malo fields through a platform built to service both developments simultaneously, Chevron said in a statement Tuesday. The $7.5-billion project – Chevron's costliest active Western Hemisphere investment – is expected to produce for at least 30 years, according to the San Ramon, Calif.-based company.
The fields are among more than a dozen oil and gas developments with a combined price tag of $150-billion that Chevron chairman and chief executive officer John Watson is counting on to help boost worldwide output by more than 20 per cent by the end of 2017. The company's board formally approved moving forward on Jack and St. Malo in October, 2010, and began hiring contracting firms to build the skyscraper-like floating platform in early 2011.
St. Malo was discovered 11 years ago in an area 450 kilometres south of New Orleans by Unocal Corp., which Chevron acquired in 2005. Jack was found by Chevron in 2004 about 40 km from St. Malo. Both formations are part of a subsea mountain range called Walker Ridge. Daily production is expected to reach 94,000 barrels of crude and 21 million cubic feet of gas.
Benchmark U.S. oil futures have fallen for five consecutive months, the longest decline since July, 2008, to January, 2009, according to data compiled by Bloomberg.