January 28, 2015 / 2:28 PM / in 3 years

Chevron to partner BP, Conoco for Gulf of Mexico leases

Current gas prices are shown at a Chevron gas station in Encinitas, California October 10, 2014.Mike Blake

(Reuters) - Oil producer Chevron Corp (CVX.N) said it would work with peers BP Plc (BP.L) and ConocoPhillips (COP.N) to explore and appraise 24 jointly held offshore leases in deepwater Gulf of Mexico.

The region is poised to deliver more than 700,000 barrels per day of new crude over three years, reversing a decline in production as it resurges after the worst offshore oil spill in U.S. history in 2010.

The potential rise in production is attracting oil companies, who are keen on joint ventures as exploration costs in offshore fields are much higher.

Chevron said on Wednesday it would operate the leases, for the Gila and Tiber fields and the Gibson exploration blocks east of Gila, in the northwest part of Keathley Canyon. [ID:nBwbH7PNQa]

BP said it would sell about half its equity interests in Gila and Tiber to Chevron. (bit.ly/1zbpdsF)

BP, whose Macondo oil well blowout caused the 2010 spill, rejoined bidders for exploration and production leases in the Gulf of Mexico last year, after the U.S. government lifted a ban barring the company from new federal contracts.

The three companies are also evaluating the potential for a centralized production facility in the region, similar to Chevron's Jack/St. Malo project that will tie a platform to the ocean floor 7,000 feet below the surface and tap a reservoir 26,000 feet deep.

Shares of Chevron, BP and Conoco where all down more than 2 percent on Wednesday, mirroring the fall in crude prices LCOc1.

Reporting by Swetha Gopinath in Bengaluru; Editing by Joyjeet Das

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below