The Rising Influence of Rising Affluence

[DewDiligence]

CVX Finds More Gas Near Gorgon

http://www.reuters.com/article/2011/02/09/chevron-idUSN0917909020110209

›SAN FRANCISCO, Feb 9 (Reuters) - Chevron Corp (CVX) announced its 10th discovery off Australia in the past year and a half, while at the same time dampening expectations for new natural gas development in its home state of California.

The find in the Carnarvon Basin is about 60 miles (100 km) northwest of Barrow Island, site of the $40 billion Gorgon liquefied natural gas facility that Chevron is building with Exxon Mobil Corp (XOM) and Royal Dutch Shell Plc (RDS-A).

The Orthrus-2 well, which is 14,098 feet (4,300 m) deep, encountered 243 feet of producible gas, of which 102 feet was found in a deeper, previously unexplored part of the field.

Chevron, the second-largest U.S. oil company, said its exploration success in the Carnarvon, Australia's leading hydrocarbon basin, underpinned further expansion opportunities for Gorgon, which is expected to be completed in 2014.

San Ramon, California-based Chevron owns 50 percent of the new find, while an Exxon unit holds 25 percent, and Shell and BP Plc (BP) each have 12.5 percent through subsidiaries.

Chevron is not as bullish about prospects for natural gas production in California, where it holds about a fifth of the Elk Hills field run by Occidental Petroleum Corp (OXY).

Oxy plans to drill 28 exploration wells in California this year, but the state is not on Chevron's list of priorities.

"We just don't see that as being competitive with the remainder of our exploration portfolio," Gary Luquette, head of Chevron's North American exploration and production arm, told the Credit Suisse Energy Conference in Colorado on Wednesday.

Asked about a resumption of drilling in the Gulf of Mexico, Luquette said he could not be sure what regulators would do, but he was planning for it to restart by the end of this year.‹