(Bloomberg) -- Chevron Corp. got the first oil from an ultra-high pressure production facility in the Gulf of Mexico, a key milestone in its target for 3% annual oil and gas output growth.
The Anchor project has the capacity to produce 75,000 barrels of oil and 28 million gross cubic feet of natural gas per day, San Ramon, California-based Chevron said in a statement. It’s the highest-pressure development in the Gulf, capable of operating at 20,000 pounds per square inch in a reservoir that reaches more than six miles below sea level.
Chevron owns 63% of Anchor and TotalEnergies SE owns the remaining 37%.
Fossil fuel production growth is once again an important metric for investors after several years of pushing oil companies to cut costs and increase shareholder returns. Chevron Chief Executive Officer Mike Wirth has said the company has enough organic growth even without its $53 billion acquisition of Hess Corp., which is locked up in arbitration with Exxon Mobil Corp. until at least mid-2025.
The Gulf of Mexico has re-emerged as a vital source of production growth for Chevron, which is aiming at increasing fossil fuel output by more than 3% a year through 2027. The oil giant is relying on more projects in the Gulf, shale output from the Permian Basin and its giant Tengiz development in Kazakhstan to hit the target over the next few years.
Anchor is located in the Green Canyon area of the Gulf, about 140 miles off the coast of Louisiana, and has recoverable resources of about 440 million barrels of oil equivalent. The project has been more than a decade in the making and required a host of new technologies to handle the high pressure and temperatures at such depth.
“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,” Nigel Hearne, executive vice president of Chevron oil products and gas, said in the statement.
Chevron expects to double production from the Gulf of Mexico to 300,000 barrels of oil equivalent by 2026, which would be nearly 10% of its global output.
(Updates with TotalEnergies stake in third paragraph.)
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