From Houston (BN): Chevron has reported that a production test from Lower Tertiary sands in the St Malo field last summer flowed 13,000b/d and could have flowed more but for equipment constraints. This well is part of the $7.5bn Jack-St Malo project in the Gulf of Mexico (SEN, 29/4).

That flowrate is more than double that of the first flowtest from Jack, reported at 6,000b/d back in 2006. The Jack-2 test set a frenzy of speculation that the Lower Tertiary might contain as much as 15bnbbl of oil. More conservative estimates now put the potential in the 3bnbbl range.

Chevron executives touted the St Malo success as further demonstration of Lower Tertiary potential and harbinger of ‘a major step-up’ in Chevron production starting in 2014, when the jointly developed fields are slated to begin commercial deliveries through a shared fpu located between them.

The development of Jack and St Malo - 40km apart in 2,200m in the Walker Ridge area, 450km south of New Orleans – is about 60% complete, according to Chevron.

Subsea equipment, due to be finished this year, will link producing wells to a box hull semi fpu to be installed later this year or early next year. The hull is finished and was due to set sail last month from Korea to Ingleside TX where topsides are to be installed next month.

The fpu can handle 170,000b/d and 1.2mcm/d. Most will come from the two Chevron fields, but the operator has said an unnamed third party has tentative plans to link a neighbouring field to the fpu.

The nearest third-party field is ExxonMobil’s Julia, about 12km north of Jack, where only exploration drilling has taken place, according to the government offshore data.

Transocean rigs are currently drilling development wells at both Jack and St Malo. A total of 28 subsea wells - 13 and 15, respectively - are planned in the initial stages of a project expected to have a 30-year life.

Construction is underway on a 219km, 24in oil pipeline linking the fpu to a Shell facility in Green Canyon 19. The crude line will be operated by Chevron. Enbridge is building a 245km, 10in gas export line from the fpu to a shallow water hub at Ship Shoal 332.

Chevron acquired the first leases for the Jack and St Malo units in 1996-97 and made the initial discoveries in 2003-04.

Offshore