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Chevron’s deepwater technology breakthrough
This week Chevron announced a technology breakthrough that could extend the production lifespan of the US Gulf of Mexico oil basin — and potentially bring billions of additional barrels of oil and gas within reach of producers globally. The US oil major has begun pumping oil and gas at its $5.7bn Anchor deepwater project in the Gulf of Mexico using specialised equipment that can operate at ultra-high pressures, about a third higher than previously deployed in the industry.
It is the first of a new wave of projects under development using so-called 20K technology, which is capable of operating in deep water at 20,000 pounds of pressure per square inch, equivalent to the pressure exerted by 650 medium-sized bulldozers. Anchor’s floating production unit is recovering oil from a reservoir six miles below the water surface, where temperatures are typically about 121C. Chevron contracted Transocean to drill the production wells and several oilfield service providers including Drill-Quip for the subsea wellhead system and NOV for pressure control equipment.
“The ability to do this and prove this [works] and have it qualified all the way through regulatory approvals is significant. We’ve demonstrated that it can be done,” Bruce Niemeyer, Chevron’s president of Americas exploration, told Energy Source. The complex geology of the deepwater US Gulf of Mexico has long made it an important test bed for offshore technologies, which are later deployed at other deepwater locations around the world.
Niemeyer said Chevron would initially focus on deploying the latest ultra-high pressure technologies in the Gulf of Mexico before looking at other global opportunities. “We have over 390 leases in the Gulf of Mexico and inside of that are some prospects that would have this same sort of requirement. We have to go through the assessment and exploratory phase of some of that before we would sanction a project in the future. But it now opens [the possibility of] those, where in the past, it wasn’t possible.” Chevron expects its Gulf of Mexico production to increase 50 per cent to 300,000 net barrels of oil equivalent per day by 2026, which is roughly 10 per cent of its global production.
Analysts say deployment of the new 20K technology by other operators could reinvigorate production in the Gulf of Mexico, which accounts for about 15 per cent of US crude production. Production from the basin has flatlined since reaching a peak of 2mn barrels of oil equivalent per day in 2019. Wood Mackenzie forecasts that 20K technology will unlock more than 2bn barrels of oil equivalent in the Gulf of Mexico that was previously unrecoverable.
