Chevron Starts Production at Anchor With Industry-First Deepwater Technology

Rhea-AI Summary

Chevron (NYSE: CVX) has announced the start of oil and natural gas production from its Anchor project in the deepwater U.S. Gulf of Mexico. This marks a significant milestone, utilizing industry-first high-pressure technology rated for 20,000 psi operation and reaching reservoir depths of 34,000 feet below sea level.

The Anchor semi-submersible floating production unit (FPU) has a design capacity of 75,000 gross barrels of oil per day and 28 million gross cubic feet of natural gas per day. Located approximately 140 miles off Louisiana's coast, the project consists of seven subsea wells tied to the FPU. The Anchor field's total potentially recoverable resources are estimated at up to 440 million barrels of oil equivalent.

Chevron holds a 62.86% working interest in the project, with TotalEnergies E&P USA, Inc. owning the remaining 37.14%. The Anchor FPU is designed as an all-electric facility to reduce carbon emissions, utilizing waste heat recovery and existing pipeline infrastructure for direct transport to U.S. Gulf Coast markets.

Positive

• Successfully implemented industry-first high-pressure technology for deepwater operations
• Anchor project has a design capacity of 75,000 gross barrels of oil per day
• Total potentially recoverable resources estimated at up to 440 million barrels of oil equivalent
• Designed as an all-electric facility to reduce carbon emissions
• Expected to contribute to Chevron's goal of 300,000 net barrels of oil equivalent per day by 2026 in the Gulf of Mexico

Negative

• None.

Energy Industry Analyst

Chevron's Anchor project marks a significant milestone in deepwater oil and gas production. The industry-first 20,000 psi high-pressure technology opens up previously inaccessible resources, potentially revolutionizing deepwater exploration. With 75,000 barrels of oil and 28 million cubic feet of gas daily capacity, Anchor substantially boosts Chevron's Gulf of Mexico output. The estimated 440 million barrels of recoverable resources underscores its economic importance. The project's all-electric design and waste heat recovery demonstrate a commitment to lower carbon intensity, aligning with industry trends. This development could position Chevron as a leader in high-pressure deepwater operations, potentially influencing future industry standards and practices.

Financial Analyst

Chevron's Anchor project represents a significant financial opportunity. With 440 million barrels of estimated recoverable resources and a 62.86% working interest, Chevron stands to gain substantial revenue. The project's successful delivery within budget showcases operational efficiency, likely to please investors. The 300,000 net barrels daily production target by 2026 from Gulf operations indicates strong growth potential. However, investors should consider the high capital costs associated with deepwater projects and potential regulatory risks. The lower carbon intensity aspect may provide a competitive edge in an increasingly ESG-focused market. Overall, Anchor strengthens Chevron's portfolio and could drive long-term value creation, potentially supporting dividend growth and share buybacks.

Environmental Expert

Chevron's Anchor project presents a mixed environmental picture. On the positive side, the Gulf of Mexico is noted as one of the lowest carbon intensity oil and gas basins globally. The all-electric facility design, waste heat recovery and vapor recovery units demonstrate efforts to minimize emissions. However, the project still contributes to fossil fuel extraction and use. The 75,000 barrels of oil daily capacity will add to global carbon emissions, albeit potentially displacing higher-emission sources. The project's long-term environmental impact will depend on how effectively Chevron manages methane leaks and other potential risks associated with deepwater drilling. Investors should monitor Chevron's ongoing environmental performance and alignment with climate goals.

HOUSTON--(BUSINESS WIRE)-- Chevron Corporation** (NYSE: CVX) announced today that it started oil and natural gas production from the Anchor project in the deepwater U.S. Gulf of Mexico. Anchor production marks the successful delivery of high-pressure technology that is rated to safely operate at up to 20,000 psi, with reservoir depths reaching 34,000 feet below sea level.

“The Anchor project represents a breakthrough for the energy industry,” said Nigel Hearne, executive vice president, Chevron Oil, Products & Gas. “Application of this industry-first deepwater technology allows us to unlock previously difficult-to-access resources and will enable similar deepwater high-pressure developments for the industry.”

The Anchor semi-submersible floating production unit (FPU) has a design capacity of 75,000 gross barrels of oil per day and 28 million gross cubic feet of natural gas per day. The Anchor development will consist of seven subsea wells tied into the Anchor FPU, located in the Green Canyon area, approximately 140 miles (225 km) off the coast of Louisiana, in water depths of approximately 5,000 feet (1,524 m). Total potentially recoverable resources from the Anchor field are estimated to be up to 440 million barrels of oil equivalent.

“This Anchor milestone demonstrates Chevron’s ability to safely deliver projects within budget in the Gulf of Mexico,” said Bruce Niemeyer, president, Chevron Americas Exploration & Production. “The Anchor project provides affordable, reliable, lower carbon intensity oil and natural gas to help meet energy demand, while boosting economic activity for Gulf Coast communities.”

The Anchor FPU is Chevron’s sixth operated facility currently producing in the U.S. Gulf of Mexico, one of the lowest carbon intensity oil and gas basins in the world. Chevron’s operated and non-operated facilities in the Gulf of Mexico are expected to produce a combined 300,000 net barrels of oil equivalent per day by 2026.

To reduce carbon emissions, the Anchor FPU was designed as an all-electric facility with electric motors and electronic controls. Additionally, the FPU utilizes waste heat and vapor recovery units as well as existing pipeline infrastructure to transport oil and natural gas directly to U.S. Gulf Coast markets.

Chevron, through its subsidiary Chevron U.S.A. Inc., is operator and holds a 62.86 percent working interest in the Anchor project. Co-owner TotalEnergies E&P USA, Inc. holds a 37.14 percent working interest.

About Chevron

Chevron is one of the world’s leading integrated energy companies. We believe affordable, reliable, and ever-cleaner energy is essential to enabling human progress. Chevron produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance our business and the industry. We aim to grow our oil and gas business, lower the carbon intensity of our operations and grow lower carbon businesses in renewable fuels, carbon capture and offsets, hydrogen and other emerging technologies. More information about Chevron is available at www.chevron.com.

Notice

As used in this news release, the term “Chevron” and such terms as “the company,” “the corporation,” “our,” “we,” “us” and “its” may refer to Chevron Corporation, one or more of its consolidated subsidiaries, or to all of them taken as a whole. All of these terms are used for convenience only and are not intended as a precise description of any of the separate companies, each of which manages its own affairs.

Please visit Chevron’s website and Investor Relations page at www.chevron.com and www.chevron.com/investors, LinkedIn: www.linkedin.com/company/chevron, Twitter: @Chevron, Facebook: www.facebook.com/chevron, and Instagram: www.instagram.com/chevron, where Chevron often discloses important information about the company, its business, and its results of operations.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This news release contains forward-looking statements relating to Chevron’s operations and lower carbon strategy that are based on management’s current expectations, estimates, and projections about the petroleum, chemicals and other energy-related industries. Words or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “advances,” “commits,” “drives,” “aims,” “forecasts,” “projects,” “believes,” “approaches,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “progress,” “may,” “can,” “could,” “should,” “will,” “budgets,” “outlook,” “trends,” “guidance,” “focus,” “on track,” “goals,” “objectives,” “strategies,” “opportunities,” “poised,” “potential,” “ambitions,” “aspires” and similar expressions, and variations or negatives of these words, are intended to identify such forward-looking statements, but not all forward-looking statements include such words. These statements are not guarantees of future performance and are subject to numerous risks, uncertainties and other factors, many of which are beyond the company’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude oil and natural gas prices and demand for the company’s products, and production curtailments due to market conditions; crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries and other producing countries; technological advancements; changes to government policies in the countries in which the company operates; public health crises, such as pandemics and epidemics, and any related government policies and actions; disruptions in the company’s global supply chain, including supply chain constraints and escalation of the cost of goods and services; changing economic, regulatory and political environments in the various countries in which the company operates; general domestic and international economic, market and political conditions, including the military conflict between Russia and Ukraine, the conflict in Israel and the global response to these hostilities; changing refining, marketing and chemicals margins; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternate-energy sources or product substitutes; development of large carbon capture and offset markets; the results of operations and financial condition of the company’s suppliers, vendors, partners and equity affiliates; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’s operations due to war, accidents, political events, civil unrest, severe weather, cyber threats, terrorist acts, or other natural or human causes beyond the company’s control; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant operational, investment or product changes undertaken or required by existing or future environmental statutes and regulations, including international agreements and national or regional legislation and regulatory measures related to greenhouse gas emissions and climate change; the potential liability resulting from pending or future litigation; the risk that regulatory approvals with respect to the Hess Corporation (Hess) transaction are not obtained or are obtained subject to conditions that are not anticipated by the company and Hess; potential delays in consummating the Hess transaction, including as a result of regulatory proceedings or the ongoing arbitration proceedings regarding preemptive rights in the Stabroek Block joint operating agreement; risks that such ongoing arbitration is not satisfactorily resolved and the potential transaction fails to be consummated; uncertainties as to whether the potential transaction, if consummated, will achieve its anticipated economic benefits, including as a result of regulatory proceedings and risks associated with third party contracts containing material consent, anti-assignment, transfer or other provisions that may be related to the potential transaction that are not waived or otherwise satisfactorily resolved; the company’s ability to integrate Hess’ operations in a successful manner and in the expected time period; the possibility that any of the anticipated benefits and projected synergies of the potential transaction will not be realized or will not be realized within the expected time period; the company’s future acquisitions or dispositions of assets or shares or the delay or failure of such transactions to close based on required closing conditions; the potential for gains and losses from asset dispositions or impairments; government mandated sales, divestitures, recapitalizations, taxes and tax audits, tariffs, sanctions, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; higher inflation and related impacts; material reductions in corporate liquidity and access to debt markets; changes to the company’s capital allocation strategies; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; the company’s ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry; and the factors set forth under the heading “Risk Factors” on pages 20 through 26 of the company’s 2023 Annual Report on Form 10-K and in subsequent filings with the U.S. Securities and Exchange Commission. Other unpredictable or unknown factors not discussed in this news release could also have material adverse effects on forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240812453723/en/

Deena McMullen

Deena.mcullen@chevron.com

+1 281-733-9323

Paula Beasley

Paula.beasley@chevron.com

+1 281-728-4426

Source: Chevron Corporation

FAQ

What is the Anchor project's production capacity for Chevron (CVX)?

The Anchor project's semi-submersible floating production unit (FPU) has a design capacity of 75,000 gross barrels of oil per day and 28 million gross cubic feet of natural gas per day.

Where is Chevron's (CVX) Anchor project located?

Chevron's Anchor project is located in the Green Canyon area of the U.S. Gulf of Mexico, approximately 140 miles (225 km) off the coast of Louisiana, in water depths of about 5,000 feet (1,524 m).

What is the estimated recoverable resource from Chevron's (CVX) Anchor field?

The total potentially recoverable resources from Chevron's Anchor field are estimated to be up to 440 million barrels of oil equivalent.

How does Chevron (CVX) plan to reduce carbon emissions in the Anchor project?

Chevron designed the Anchor FPU as an all-electric facility with electric motors and electronic controls. It also utilizes waste heat and vapor recovery units, and existing pipeline infrastructure to reduce carbon emissions.