Chevron approves $7.5-bn to develop two oil fields in Gulf of Mexico

US oil major, Chevron Corp yesterday approved a $7.5 billion plan to develop two large oil and natural gas fields in the Gulf of Mexico, just days after the US government lifted a the moratorium on deepwater oil and gas drilling following BP's massive oil spill.

Chevron is developing the Jack and St. Malo project located in the Lower Tertiary trend in the deepwater US Gulf of Mexico. It has working interests of 50 per cent in the Jack field, while Norway's Statoil and A P Moeller-Maersk hold 25 per cent each.

Chevron holds 51-per cent in the St. Malo field, while Statoil holds 21.5 per cent, Petroleo Brasileiro SA 25 per cent and Exxon Mobil and Eni SpA, with 1.25 per cent each.

The Jack and St. Malo fields are located within 25 miles of each other approximately 280 miles south of New Orleans, Louisiana, in water depths of 7,000 feet, which is deeper than the 5,000 feet of BP's Macondo oil well, which created one of the world's worst environment disasters.

Chevron said that the initial development of the project scheduled to start in 2014 will require an investment of approximately $7.5 billion. The Jack and St. Malo fields are estimated to contain combined total recoverable resources in excess of 500 million oil-equivalent barrels.

Chevron's decision to go ahead with the project comes barely 9 days after the US government lifted a ban on 12 October 2010 on deepwater oil and gas drilling in the Gulf Of Mexico. (See: US lifts ban on offshore drilling in Gulf of Mexico)