Chevron Corp. and partner Total SA have made a final investment decision for the deepwater Anchor oil field, pushing what would become the industry’s first development to utilize high-pressure 20,000 psi technologies in the U.S. Gulf of Mexico (GoM) closer to reality.

Initial development of the field, which could hold more than 440 million barrels of recoverable oil-equivalent resources, is estimated to cost $5.7 billion.

Chevron serves as operator, holding a 62.86% interest in the field, with Total holding the rest. The partners are targeting first oil in 2024.

“This decision reinforces Chevron’s commitment to the deepwater asset class,” Jay Johnson, executive vice president of upstream operations for Chevron, said in a statement. “We expect to continue creating value for shareholders by delivering stand-alone development projects and subsea tiebacks at a competitive cost.”

Plans are for the field, located in more than 1,524 m (5,000 ft) of water about 225 km (140 miles) off the Louisiana coast, to be developed initially with seven subsea wells connected to a semisubmersible floating production unit (FPU) with a capacity of 75,000 barrels of crude oil and 28 million cubic feet of gas per day.

Source: Chevron Corp.
Source: Chevron Corp.

The field is located in the GoM’s Green Canyon area and has an operating pressure of 20,000 psi. Industry players working as part of joint industry R&D projects have been designing systems and technology capable of producing at such an ultrahigh pressure for more than a decade.

With the move, the industry is expected to see its first ultra-deepwater floater rated for 20,000 psi operations put to use if all goes as planned. The drillship will feature dual 20,000 psi BOPs, net hook-load capacity of three million pounds, 165-ton active heave compensating crane and an enhanced dynamic positioning system.

Earlier this year, Chevron tapped Schlumberger Ltd. for a 20-year subsea equipment and services master contract that includes standardized equipment capable of withstanding up to 20,000 psi. The oilfield services company said Dec. 12 its OneSubsea division will supply an integrated subsea production and multiphase boosting system for Anchor. Equipment, according to a news release, includes vertical monobore production trees and multiphase flowmeters rated up to 20,000 psi, production manifolds and an integrated manifold multiphase pump station rated to 16,500 psi along with subsea controls and distribution.

Chevron and Total’s sanctioning of the closely watched development marks a milestone for the industry, while also potentially unlocking other high-pressure resources in the GoM.

Anchor, along with three other projects expected to reach FID within 18 months, could bring more than US$10 billion of capital investment to the region, according to Justin Rostant, an analyst with Wood Mackenzie’s Gulf of Mexico team. The firm valued Anchor at $1.5 billion, giving it a development-cycle breakeven of US$51 per barrel (PV 10, Brent).

“Chevron’s sanction of the Anchor project shows that the US Gulf of Mexico still offers attractive investment opportunities for large greenfield developments,” Rostant said in a statement Dec. 12. “While over 80% of projects sanctioned in the last five years are shorter-cycle subsea tiebacks, standalone developments like Anchor are still able to compete for development capital.”

The Tigris, Kaskida and North Platte fields are among the GoM’s ultra-high pressure reservoirs.

In a separate news release Dec. 12, Total said that FEED has started for the North Platte discovery, which is spread across four blocks in the Garden Banks area.

“Like Anchor, North Platte requires the use of 20,000 psi technologies,” Total said. “The field development plan is based on eight subsea wells and two subsea drilling bases connected via two production loops to a newbuild, lightweight [FPU],” designed for potential future tie-ins.

With a 60% working interest, Total is the operator of North Platte. Its partner is Equinor ASA.