Chevron, Exxon, Fina to proceed with $750 million Genesis project

SAN FRANCISCO -- Chevron U.S.A. Production Co., Exxon Co. and Fina Inc. said they'll proceed with the $750 million Genesis Development Project, an oil and gas venture deep in the Gulf of Mexico.

Chevron will operate Genesis, its first management of a deepwater development. Deepwater projects allow oil drilling up to 5,000 feet deep, more than three times the maximum depth of conventional offshore drilling.

Chevron, which participated in three deepwater wells operated by other companies, holds a 57 percent interest in the project. Exxon holds a 38 percent interest and Fina 5 percent.

Production is scheduled to start in late 1998, with peak production in 2000 of about 55,000 barrels of oil and 72 million cubic feet of natural gas per day, Chevron said in a statement.

Recoverable reserves for 15 to 20 years are estimated to be the equivalent of 160 million barrels of oil, Chevron said.

"Genesis ... reaffirms the deepwater gulf's role as a promising new source of oil and gas," said Bob Herrin, Chevron U.S.A. vice president in charge of Gulf of Mexico operations.

Deepwater projects usually require expensive floating production facilities attached to the sea floor with cables, unlike conventional offshore projects, which use steel platforms that stand on the sea floor.

The Genesis project will use a floating "spar" production facility moored to the sea floor by 14 anchor lines. Chevron said the design will save money and time during development, yet perform as well as other deepwater production systems.

The spar structure will be built by Spars International Inc., a Houston-based joint venture of Aker Oil and Gas Technology and J. Ray McDermott.

The contract to design and produce the platform is valued at about $300 million.

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