Chevron’s Anchor breakthrough in Gulf of Mexico helps secure Covington jobs, unit chief says

The technological breakthrough that allowed Chevron Corporation to start pumping oil from the Anchor oilfield in the Gulf of Mexico this week will help to secure the 540 jobs at the company’s operations in Covington, the unit’s chief said.

The Anchor platform, which operates in mile-deep water in the Gulf of Mexico, 140 miles off Louisiana’s coast, started producing this week thanks to new technology developed by Chevron and its partners which allow previously unreachable oil reservoirs to be tapped.

“Anytime new technology has come into our industry it tends to unlock a new frontier, and we’ve now proven it’s possible,” said Brent Gros, the head of the Covington unit that is responsible for Chevron’s Gulf operations.

High pressure

The technology developed by Chevron, together with oil services company Transocean and other partners, has made it possible to operate deepwater oil and gas extraction at a much higher pounds per square inch of pressure than the previous limit.

To exploit the Anchor field with its particular characteristics and reservoir depth of 34,000 feet below the ocean floor, they had to pump at 20,000 pounds per square inch of pressure, compared to a previous limit of 15,000. This required the partners to develop pumps with much thicker casing, for example, requiring construction of a rig capable of handling the heavier pump lines.

Chevron’s new technology will not only allow Anchor to access its approximately 440 million barrels of oil but will unlock more than 2 billion barrels of previously unrecoverable oil in the Gulf, according to a research report this week by consultants Wood Mackenzie.

“First oil from Anchor is a major technological milestone in the U.S. Gulf of Mexico, culminating from a decadelong effort from operators, service companies and regulators,” Wood Mackenzie analyst Mfon Usoro wrote.

“The Gulf of Mexico has repeatedly proven itself as a hub for technological innovation and the deployment of the ultra-high-pressure technology puts the region once again at the forefront of a technology breakthrough,” he added.

Oil jobs

The greater New Orleans area has been leaking oil sector jobs for decades, partly because of a general contraction in the industry’s employment levels but also because many companies have concentrated their head offices in Houston.

Chevron kept its presence in New Orleans after Hurricane Katrina and relocated to its current northshore headquarters in 2019.

Among the major oil companies, Chevron and Shell Oil are bright spots in that they’ve both kept their Gulf operational headquarters locally

Gros said that Anchor was discovered in 2014 but it took a decade to develop the technology to bring it online. It will bring the number of Chevron-operated Gulf oil and gas fields to six, raising average production to about 300,000 barrels per day, or almost 10% of the company’s worldwide production.

He noted that Chevron also has acquired 100 new exploration blocks in the Gulf with the prospects for commercial finds now raised because of the new technology.

Activists worried about global warming have decried further exploration in areas like the Gulf as prolonging the transition away from fossil fuels and the risks that brings from climate change.

Chevron and other major oil companies have pointed to the fact that oil extraction from the Gulf is among the lowest emissions-generating provinces in the world, so should be favored over oil from Canada’s Alberta tar sands or any of the fracking fields that require huge energy use to produce.