SAN FRANCISCO (Dow Jones Newswires), Sept. 4, 2009
Chevron Corp. is on the verge of starting up its Tombua-Landana oil project in Angola, one of the largest the oil giant is scheduled to bring into production this year, a top Chevron executive said Thursday.
"It's imminent," said George Kirkland, Chevron's Executive Vice President for Global Upstream and Gas in an interview at the company's San Ramon, Calif. headquarters. "We'll be announcing start-up, I think, very shortly."
The company had previously said that the project would come on stream in the third quarter. The project, which is expected to reach a peak production capacity of 100,000 barrels of crude oil per day, underscores Angola's growing importance for international oil companies.
Chevron, the second largest U.S. oil company by market capitalization, started oil production in July from the neighboring Mafumeira Norte project, which is set to peak at 30,000 barrels of oil and 30 million cubic feet of natural gas per day. In August, the company also announced a "significant" discovery in offshore Angola.
The start-up of Tombua-Landana also highlights how Chevron, which for years struggled to increase its oil and gas output, now plans to raise its production with a large portfolio of major projects coming on stream.
The company will also make a final investment decision on the Gorgon project, a mammoth proposed liquefied natural gas development offshore Western Australia, within the next 30 days, Kirkland said.
Gorgon is one of the largest hydrocarbon developments ever planned, has potential reserves of more than 40 trillion cubic feet of gas and an estimated economic life of at least 40 years from the time of startup. It's geared to quench Asia's future thirst for natural gas.
"We're getting extremely close," said Kirkland. The executive added that he expects that the final investment decision will be announced be within "the next 30 days," but he couldn't provide an exact date. The company will disclose the estimated cost of the project "sometime between mid-September and March."
The Australian government, which has approved production licenses for the project, estimates its value at $40 billion. Gorgon is being developed by Chevron, Exxon Mobil Corp. and Royal Dutch Shell PLC. Shell and Exxon each have a 25% stake in the project, and Chevron, the operator, controls 50%.
Copyright (c) 2009 Dow Jones & Company, Inc.
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