The company is the first to produce oil from a Paleogene reservoir using 20K technology. Plus, Nigeria and Equatorial Guinea sign a trans-national gas pipeline agreement.
Greetings from Chicago! My wife and I are revisiting the Windy City, where I got my PhD from The University of Chicago some 34 years ago. It’s so special to see my old Department of Geophysical Science building and so fun to reconnect with my old friends.
Next week, I'll be heading to IMAGE in Houston to enjoy the many expert-led talks and opportunities to connect with others in the field. You can join me at the booths, poster sessions, and more with a free Exhibitor Guest Pass. Use priority code GP24IMG and select AAPG as your host organization during check out.
Now, let’s get to two interesting pieces of energy news from the past week.
Shangyou Nie
Editor, Well Read
Chevron Delivers First Oil From Anchor Project Using 20K Technology
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Chevron announced that it started oil and gas production on 12 August from the Anchor project in deepwater Gulf of Mexico. This highly anticipated first oil has been achieved using 20K technology, turning a new page in oil production in deepwater in the Gulf of Mexico and potentially the world.
Why it matters:
To safely and economically produce from reservoir rocks with pressure greater than 20,000 psi has been an aspiration for the industry.
Chevron became the first producer to use 20K technology to produce oil and gas from a Paleogene reservoir— rocks buried more than 34,000 feet (or over 11,000 meters) beneath the sea floor.
Chevron said that it will produce 300,000 boe net from its fields in the Gulf of Mexico by 2026.
What they are saying: “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,” said Nigel Hearne, EVP for Chevron Oil, Products & Gas.
About 20K technology: 20K technology has been developed within the industry for more than a decade. It has been a joint effort by operators, led by Chevron, the service industry, and regulators.
Anchor field details:
Anchor field is located some 140 miles offshore from Louisiana, in Green Canyon, at a depth of 5,000 feet (1,524 meters).
Anchor is being developed by a semi-submersible floating production unit (FPU) to handle 75,000 barrels of oil and 28 million cubic feet of gas per day, through an existing pipeline system.
Chevron is the operator and holds 63 percent of equity in the Anchor field. TotalEnergies owns 37 percent.
Potential recoverable resources from Anchor are estimated as 440 million boe.
Shell is also trying to develop its Sparta field in the U.S. Gulf of Mexico using 20K technology.
A number of smaller U.S. Gulf of Mexico E&P players might be able to join the group using 20K technology.
Implications:
Based on an estimate from WoodMackenzie, more than 2 billion boe of oil and gas resources in the U.S. Gulf of Mexico could be unlocked by 20K technology.
Successful application of 20K technology could extend the life of the U.S. Gulf of Mexico deepwater business, which produced 1.9 million barrels of oil per day in 2023.
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The agreement covers legislative and regulatory measures of the gas pipeline, named “the Gulf of Guinea Gas Pipeline (GGGP).”
It also specifies the ownership and general principles for GGGP.
In addition to providing gas to EG LNG, GGGP will help increase gas sales to power companies and industrial users, boosting economic collaboration in West Africa.
Details of the agreement are not published.
About the EG LNG project:
EG LNG began production in 2007, with an initial capacity of 3.7 MTPA.
EG LNG has a multi-phase plan to build up capacity, an effort to capitalize on the commercial opportunity as a supplier to Europe. Train 2 is planned to have capacity of 4 MTPA.
These plans could be impacted by ConocoPhillips’ acquisition of Marathon Oil.
Similar trans-national projects in Africa:
Through the 678-kilometer West African Gas Pipeline (WAGP), Nigeria started to supply gas to Benin, Togo, and Ghana in 2006.
Ten years later, Nigeria and Morocco agreed to build a pipeline to supply Nigerian gas to Europe through Morocco. That pipeline is yet to be constructed.
During CERAWeek in March, a Nigerian representative said that FID for the Nigeria-Morocco pipeline will be taken “before the end of 2024.”
Some industrial analysts remain skeptical of whether the Nigeria-Morocco pipeline could ever become reality.
What to watch:
What concrete steps will follow the signing of the Nigeria-Equatorial Guinea gas pipeline agreement?
Will Nigeria be able to take FID on Nigeria-Morocco gas pipeline in 2024?
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