Exploration and Production Strategy: Grow profitably in core areas and build new legacy positions.
Upstream is the engine for Chevron's future growth. In 2011, net oil-equivalent production averaged 2.67 million barrels per day. We are developing a number of major capital projects that are expected to enable us to grow net oil-equivalent production to an anticipated 3.3 million barrels per day by 2017. Additionally, we hold exploration acreage in some of the world's most promising areas.
Gas and Midstream Strategy: Commercialize our equity gas resource base while growing a high-impact global gas business.
Our next generation of growth will be enhanced by our vast resources of natural gas. Overall, we have more than 160 trillion cubic feet of natural gas unrisked resources, an amount equivalent to approximately 27 billion barrels of crude oil. Over the next five years, we expect to begin deliveries of liquefied natural gas (LNG) from four major capital projects: Gorgon and Wheatstone offshore Western Australia and projects in Angola and Indonesia.
Production Operations
In 2011, our existing producing fields continued to focus on safety, reducing decline rates and improving reliability. The use of our proprietary technologies contributed to our performance. Our i-field™ program applies information technology to improve production from mature fields, and our Real-Time Reservoir Management tool enhances the efficiency of reservoir surveillance. Through the application of steamflood technology, we continued to boost recovery rates from selected mature heavy-oil reservoirs. Three of our largest steamflood projects are in the Kern River Field in California, the Duri Field in Indonesia and the Permian Basin in Texas and New Mexico. We also are piloting a large-scale steamflood of the Wafra Field in the Partitioned Zone between Kuwait and Saudi Arabia.
During the year, we completed a number of projects at major producing properties to sustain the company's production growth over the long term. Among them were the startup of the fourth oil-stabilization train at the giant Karachaganak Field in Kazakhstan and the ramp-up of production from the deepwater Perdido Regional Development Project in the U.S. Gulf of Mexico.
Major Capital Projects
We are on track with a number of major capital projects that will help us meet our production-growth target. Included in our portfolio are 95 projects, each with a net Chevron investment in excess of $250 million. Additionally, we have added approximately 18 million net acres to our exploration portfolio since 2009, giving us further opportunities for organic growth.
In the United States, we are one of the largest leaseholders in the prolific deepwater Gulf of Mexico. Over the past few years, we added significant production from deepwater projects in the Gulf. We now are developing three other major capital projects there: Jack/St. Malo, $7.5 billion; Big Foot, $4.1 billion; and Tubular Bells, $2.3 billion. At the same time, we are moving our $2.3 billion Tahiti 2 development program forward with injection wells that are expected to extend peak production and increase recovery. First production from Tahiti 2 is expected in early 2012.
The $37 billion Gorgon LNG project offshore Western Australia is one of our largest single investments to date. A 75-mile (121-kilometer) seafloor pipeline is being built to carry natural gas from the Gorgon fields to processing facilities on Barrow Island. Currently under construction are a three-train, 15 million-metric-ton-per-year LNG plant and a domestic gas plant. The development also will include the world's largest commercial system to inject carbon dioxide into underground reservoirs. We have secured long-term off-take commitments from customers in Asia for approximately 70 percent of our share of LNG output. We are on target for first deliveries in late 2014.
Also in Western Australia is our $29 billion Wheatstone LNG project. With Gorgon, it will make Chevron one of the world's leading LNG producers. The first phase of Wheatstone will consist of two LNG processing trains with a combined capacity of 8.9 million metric tons per year, a domestic gas plant and associated offshore infrastructure. The onshore facilities will be located near Onslow in the Pilbara region. Approximately 60 percent of our equity off-take is presently covered under binding long-term agreements. First LNG deliveries are expected in 2016.
Since mid-2009, we have made 13 natural gas discoveries in Western Australia's Carnarvon Basin, which are expected to provide expansion opportunities for our LNG projects.
At the end of 2011, construction was nearing completion on a $10 billion, 5.2 million-metric-ton-per-year LNG plant onshore at Soyo, Angola. The plant is designed to process up to 1.1 billion cubic feet of natural gas per day from offshore fields and allow us to commercialize natural gas resources that once had to be flared. The project is expected to begin operations in 2012.
In Indonesia offshore East Kalimantan, engineering and design contracts have been awarded for the deepwater Gendalo-Gehem natural gas development. The natural gas is intended to be used domestically as well as converted to LNG at a plant in Bontang, East Kalimantan.
In the Gulf of Thailand, we began producing natural gas in 2011 from the Platong II natural gas project. The project is expected to increase Thailand's domestic production by more than 10 percent and boost Chevron's net natural gas production from the Gulf of Thailand by more than 20 percent. In China, the first phase of the $4.7 billion Chuandongbei sour gas project is expected to start up in 2013. This is a large and complex project located onshore in the Sichuan Basin. When completed, it is expected to reach a maximum total natural gas production rate of 558 million cubic feet per day.
Two multibillion-dollar projects in Nigeria are expected to be strong contributors to future production. Our $1.9 billion Agbami 2 development program is expected to enable us to sustain a maximum total daily liquids production rate of 250,000 barrels and extend the period of peak production of this giant deepwater field by an expected six years. The nearby Usan Field, an $8.4 billion development, is expected to produce first oil in 2012.
In 2011, the Caspian Pipeline Consortium began construction on the $5.4 billion expansion of the Caspian Pipeline that carries crude oil from the giant Tengiz Field in western Kazakhstan to a dedicated terminal on the Black Sea. The three-phase expansion will almost double current capacity, eventually reaching 1.4 million barrels per day by 2016. The pipeline will enable us to accommodate future growth from our Tengiz and Karachaganak fields.
During the year, development drilling began offshore Brazil at the Papa-Terra Field, which has potentially recoverable crude oil of approximately 380 million barrels. First production is expected in 2013.
Shale Gas
We see excellent opportunities in shale gas and are making strategic acquisitions to enhance our position in this emerging resource. Early in the year, we completed our $4.5 billion acquisition of Atlas Energy, Inc. The acquisition not only gave us premier acreage in Pennsylvania's Marcellus Shale, but also the expertise of a highly talented and skilled workforce that shares our commitment to operational excellence. We have since added to our acreage in the Marcellus and now have a shale gas presence in Canada, Poland, Romania and the United States.
As we develop our shale gas holdings, we take steps to protect groundwater during hydraulic fracturing and over the life of the well. During the year, we completed several tight gas sand wells in the Piceance Basin in Colorado using multiple-staged liquefied petroleum gas fracture treatments. This Chevron-developed technology possibly could be applied to shale gas wells to significantly reduce the use of water resources and has been recognized by the World Shale Gas Conference for its economic and environmental performance potential.
Exploration
Our exploration program has added approximately 10.5 billion barrels of oil-equivalent to our resource base since 2002. A string of 13 discoveries in Australia's Carnarvon Basin since mid-2009 will help support future expansions of the giant Gorgon and Wheatstone LNG projects. In the U.S. Gulf of Mexico, we announced a new deepwater discovery at the Moccasin prospect and began drilling ultradeep wells to test the natural gas potential of the Gulf shelf. We also added more than 500 million barrels of oil-equivalent to our resource base from acreage in West Texas. Other exploration activity is under way in China's Pearl River Mouth Basin; deepwater Liberia; and the gas shales of Canada, China, Poland, Romania and the United States.
Posted: April 2012