Chevron announced on Monday that it has begun oil and gas production from a project in the Gulf of Mexico, bringing the company a step closer to achieving its goal of increasing its output from the basin by 50 percent this year.
The project, costing $1.6 billion, named 'Palymore', is located about 260 kilometers southeast of New Orleans, and consists of three wells, expected to produce up to 75,000 barrels of oil equivalent per day.
Chevron aims to increase oil and gas production from the Gulf of Mexico to 300,000 barrels of oil equivalent per day by 2026, while also working to reduce costs across all its sectors by up to $3 billion.
Bruce Neimeyer, President of Exploration and Production for the Americas, said Palymore is distinguished by its connection to an existing facility, which allowed us to bring production to market more quickly.
He added that this project is Chevron's first in a geological formation in the Gulf called Norphlet, where the oil and gas industry has historically seen fewer discoveries compared to other parts of the basin.
Neimeyer explained that technological developments are essential for expanding resource exploration, such as the use of ocean bottom nodes, allowing geophysicists to collect better data beneath the ocean floor.
Neimeyer said the company has 370 lease contracts in the Gulf of Mexico and expects to participate in a lease deal this year from the administration of U.S. President Donald Trump.
Palymore is estimated to own 150 million barrels of oil equivalent from extractable resources.
The emerging Palymore company comes after Chevron announced its first oil production in August from the Anchor project, which is located in the Gulf of Mexico and represents a technological breakthrough enabling operations in deepwater pressures of up to 20,000 pounds per square inch.