Exploration and Production
Chevron continues to make significant strides developing energy resources off the northwest coast of Australia. Our strategy is to grow and commercialize our resources to create an effective natural gas business in Australia and the Asia-Pacific region.
During 2008, total daily production was 159,000 barrels of crude oil and condensate, 23,000 barrels of liquefied petroleum gas (LPG), and 2.3 billion cubic feet of natural gas. The company's net oil-equivalent production in 2008 was 96,000 barrels per day.
The Barrow Island and Thevenard Island oil fields and the North West Shelf Venture make important contributions. These operations lie offshore Western Australia, about 990 miles (1,600 km) north of Perth.
North West Shelf Venture
For 25 years, the North West Shelf Venture (NWSV) has been Western Australia's largest producer of domestic natural gas and currently provides about 65 percent of the state's total production. For 20 years, NWSV has been exporting liquefied natural gas to international customers in the Asia-Pacific region.
NWSV operations include the North Rankin, Goodwyn, Perseus, Angel and Echo Yodel natural gas fields and the Wanaea, Cossack, Lambert and Hermes crude oil fields. Chevron has a 16.7 percent nonoperated working interest in NWSV.
In 2008, Chevron's total daily production from NWSV averaged 150,000 barrels of crude oil and condensate (25,000 net), 23,000 barrels of LPG (4,000 net), and 2.2 billion cubic feet of natural gas (374 million net). Approximately 70 percent of the natural gas is sold as liquefied natural gas (LNG), primarily under long-term contract to major utilities in Japan, South Korea and China. Natural gas also is sold into the Western Australian domestic gas market.
In September 2008, NWSV commissioned a fifth LNG train as part of an AU$2.6 billion expansion of its onshore LNG facilities. Designed to produce 4.2 million metric tons of LNG per year, Train 5 boosts total plant production capacity to more than 16 million metric tons.
The Angel natural gas field development began production in October 2008. The development includes an unmanned production platform and underwater pipeline that feeds onshore LNG and domestic natural gas plants.
NWSV participants also are evaluating additional natural gas supply projects for feeding the five LNG trains and a domestic gas plant. The first of these projects, the North Rankin 2 project, is designed to recover remaining low-pressure natural gas from the North Rankin and Perseus natural gas field. Plans call for a second platform, North Rankin B, to be built about 330 feet (100 m) away from the existing North Rankin A platform. The project also includes modifications and refurbishment of North Rankin A. The two platforms would be connected by a bridge and are designed to be operated as a single integrated facility. Project startup is expected in 2013.
Additionally, a range of small gas fields in the western section of the Goodwyn reservoirs is slated for development, with startup expected by 2014.
Barrow Island and Thevenard Island
Chevron holds a 57.1 percent interest in the Barrow Island crude oil producing facilities. We operate the field safely and economically while protecting biodiversity within the Barrow Island Nature Reserve.
We also operate fields near Thevenard Island, where we hold a 51.4 percent interest. Thevenard Island, some 43 miles (70 km) southwest of Barrow, provides a base for processing and storing hydrocarbons from several nearby oil fields.
In 2008, total daily production for these operations was 9,000 barrels of crude oil (5,000 net).
Greater Gorgon Area Development
Chevron is the operator and largest stakeholder in the Gorgon LNG and domestic gas project. Natural gas from the Gorgon and Io/Jansz fields is expected to supply the project for at least 40 years.
The Gorgon Project is Australia's largest energy resource project.
The development plan calls for a three-train, 15 million-metric-ton-per-year LNG facility on Barrow Island, integrating domestic gas into the project. Over the last 40 years, we have established a successful record of operating Australia's largest onshore crude oil field on Barrow Island.
In September 2009, after obtaining the necessary approvals from state and federal governments, we made the final investment decision and announced the project would proceed.
In June 2008, Chevron and the Gorgon joint venture secured an additional AU$1 billion to prepare for a final investment decision on the Gorgon Project.
The Gorgon Project experienced several contract milestones in 2008. A lease was signed to secure a site at Mermaid Marine's Dampier facility for a Gorgon supply base. An agreement was reached with the Australian Marine Complex in Cockburn Sound for a waterfront service area. And Vetcogray was awarded a five-year master service agreement to supply subsea equipment and services.
First gas production from the project is planned for 2014.
Visit Gorgon Project.
Wheatstone
The Wheatstone and Iago fields are contained in three permits located between the North West Shelf Venture area and the Greater Gorgon Area. Two permits, wholly owned by Chevron, cover the Wheatstone Field. Chevron has a 66.7 percent interest in the southern permit, which contains about half of the Iago Field.
In early 2008, Chevron announced plans to develop an LNG and domestic gas project associated with the Wheatstone natural gas discovery. A successful field appraisal program, which included drilling seven wells and a detailed site screening and selection study, was completed in 2008. Following the completion and analysis of the appraisal program, the fields are estimated to hold enough natural gas resources to support a multitrain LNG facility with an adjacent domestic natural gas plant. Front-end engineering and design is due to begin in the second half of 2009.
Chevron continues to explore for new resources in Australia. In addition to the 2008 appraisal drilling program in the Wheatstone and Iago fields, we conducted appraisal drilling at the Calliance and Torosa fields in the Browse Basin and completed a commitment well in Block WA-274-P testing the northern extension of the Ichthys Field in the east Browse Basin.
During the year, 3-D seismic data was acquired for Block WA-268-P, within which the Chandon discovery is located, and a 2-D 870-mile (1,400-km) seismic survey was completed in WA-383-P in the Exmouth region.
In May 2008, the company divested its interests in Sorrel Basin exploration permits, located offshore Tasmania.
Marketing and Retail
Chevron is pursuing sales to Australian industrial natural gas customers and beyond that to LNG markets in China, Korea and Japan.
By the end of 2008, NWSV participants replaced all but two existing long-term LNG contracts with new sales and purchase agreements, which include revised pricing terms. Another agreement was signed in the first quarter of 2009. NWSV's Japanese customers include:
- Chugoko Electric
- Toho Gas
- Chubu Electric Power Co.
- Kansai Electric Power Company Inc.
- Tokyo Gas
- Osaka Gas Co. Ltd
- Tokyo Electric Power Company Inc.
- Kyushu Electric
- Tohoku Electric
Caltex
Chevron holds a 50 percent interest in Caltex Australia Limited, a publicly listed company on the Australian Stock Exchange. Based in Sydney, Caltex Australia is the country's No.1 petroleum and convenience marketer.
The company trades under the Caltex brand, with wholesale, commercial and retail marketing operations in all states and territories.
Caltex Australia owns and operates two fuel refineries, one at Kurnell in Sydney and the other at Lytton in Brisbane. It also has a lubricating oil refinery at Kurnell.
Caltex Australia's national service station network includes more than 2,000 branded sites, most of which are Caltex-branded. More than 500 are Caltex Woolworth's co-branded outlets. Caltex Australia holds an estimated 35 percent market share of the major transportation fuels sold in the country.
Caltex Australia owns or leases 88 petroleum product storage depots that the company operates or licenses to distributors. In addition, Caltex Australia has commercial and industrial customers in the mining, industrial, aviation and transport sectors.
Updated: September 2009