Exploration and Production
Our subsidiary Chevron Australia Pty Ltd is 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.
For 2012, our net daily oil-equivalent production averaged 99,000 barrels.
Greater Gorgon Area Development
Chevron is the operator of the Gorgon Project, which combines the development of the Gorgon Field and the nearby Jansz-Io Field. Facilities being built on Barrow Island include a three-train, 15.6 million-metric-ton-per-year liquefied natural gas (LNG) facility, a carbon sequestration project and a domestic natural gas plant with a capacity of 280 million cubic feet per day. Chevron has a 47.3 percent interest across most of the Greater Gorgon Area.
The offshore portion of the development includes subsea infrastructure and pipelines. Maximum total daily production from the project is expected to reach approximately 2.6 billion cubic feet of natural gas and 20,000 barrels of condensate. Startup of the first train is expected in late 2014, leading to the first LNG cargo in the first of quarter 2015. The first phase of development is expected to cost $52 billion.
Approximately 60 percent of the project had been completed as of March 2013. In 2012 and early 2013 the material offloading facility on Barrow Island was completed and the first LNG plant modules were installed. Installation began on the Train 1 compressors. Construction continued on the LNG tanks and jetty. The village on Barrow Island that will accommodate 5,000 workers was completed in early 2013.
The first subsea wellhead trees and subsea pipelines were installed in 2012. We began drilling eight Gorgon wells and 10 Jansz-Io wells in 2012 and plan to complete them in 2013.
Gorgon has awarded contracts for materials and services totaling $33 billion, more than $18 billion of that with Australian companies. Modules are also being built in South Korea, China and Indonesia.
In late 2013, front-end engineering and design is expected to begin for an expansion project to develop a fourth train, assuming stable fiscal terms.
Chevron announced seven natural gas discoveries in the Carnarvon Basin in 2012 and early 2013. Among them:
Read more about the Gorgon Project.
Wheatstone
Chevron is the operator of the Wheatstone Project, which includes a two-train, 8.9 million-metric-ton-per-year LNG facility and a domestic gas plant, both at Ashburton North. Chevron plans to supply the facilities with natural gas from the Wheatstone and Iago fields. The maximum total daily production from these and third-party fields is expected to be approximately 1.6 billion cubic feet of natural gas and 30,000 barrels of condensate. Startup of the first train is expected in 2016. The first phase of the project is expected to cost $29 billion.
In 2012, construction continued on housing, roads and other infrastructure projects as well as the project's offshore platform and subsea equipment.
Chevron also signed agreements in 2012 that reduced the company's interest in offshore licenses to 80.2 percent and in LNG facilities to 64.1 percent.
North West Shelf Venture
Chevron has a 16.7 percent nonoperated interest in the North West Shelf (NWS) Venture in Western Australia. The joint venture operates offshore producing fields and extensive onshore facilities that include five LNG trains and a domestic gas plant. Production comes from the Angel, Echo Yodel, Goodwyn, North Rankin and Perseus natural gas fields and the Cossack, Hermes, Lambert and Wanaea crude oil fields.
Net daily production during 2012 averaged 20,000 barrels of crude oil and condensate, 4,000 barrels of liquefied petroleum gas, and 428 million cubic feet of natural gas.
The North Rankin 2 Project is expected to begin production in mid-2013. The $5.4 billion project is designed to recover the remaining low-pressure natural gas from the North Rankin and Perseus fields to maintain the NWS Venture's daily production capacity of about 2 billion cubic feet of natural gas and 39,000 barrels of condensate.
Browse Basin
In October 2012, Chevron exchanged its 16.7 percent interest in the East Browse leases and its 20 percent interest in the West Browse leases for a cash payment and a 33.3 percent interest in the WA-205-P and WA-42-R blocks in the Carnarvon Basin, which contain the Clio and Acme fields. Chevron now holds a 100 percent interest in these blocks. The company still has other nonoperated interests ranging from 24.8 percent to 50 percent in three other blocks in the Browse Basin. Drilling in late 2012 resulted in a natural gas discovery at the Crown prospect in Block WA-274-P.
Barrow Island and Thevenard Island
Chevron has a 57.1 percent interest in the Barrow Island crude oil production facilities, Australia's largest and oldest onshore oil field. We operate the field safely and economically while protecting the biodiversity in the Barrow Island Nature Reserve.
We also have a 51.4 percent interest in and operate fields near Thevenard Island, 43 miles (70 km) southwest of Barrow Island. Thevenard Island provides a base for processing and storing hydrocarbons from several nearby oil fields.
In 2012, net daily production averaged 4,000 barrels of crude oil.
Cooper Basin
In February 2013, Chevron reached an agreement to acquire interests in two onshore blocks with potential for natural gas production from tight gas and shale. Tight gas is produced from reservoirs with relatively low porosity. The blocks cover approximately 810,000 total acres (3,277 sq km) in the Cooper Basin in central Australia.
The acquisition is pending government approvals.
Supplying Natural Gas
Chevron markets natural gas from its Gorgon and Wheatstone projects to LNG markets in the Asia-Pacific region and to industrial and commercial gas customers in Western Australia.
Gorgon
Chevron has signed long-term LNG sales and purchase agreements with six Asian customers for delivery of approximately 4.8 million metric tons of LNG per year, which brings delivery commitments to approximately 65 percent of Chevron's share of LNG from the Gorgon project. Chevron also has long-term agreements to deliver approximately 65 million cubic feet per day of natural gas to Western Australian natural gas consumers starting in 2015.
Wheatstone and NWS Venture
In 2012, Chevron signed LNG agreements with Asian customers. At the end of the year, more than 80 percent of Chevron's share of LNG was covered under long-term agreements with customers in Asia.
Approximately 70 percent of Chevron's NWS Venture natural gas was sold in the form of LNG to major utilities in Asia, primarily under long-term contracts. The remainder was sold to the domestic market in Western Australia.
Caltex
Chevron holds a 50 percent interest in Caltex Australia Limited, a publicly listed company on the Australian Securities Exchange. Based in Sydney, Caltex Australia is the country's leading fuel 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 oil refineries, one near Sydney and the other near Brisbane. These two refineries account for more than a third of Australia's total capacity. Caltex Australia also operates 12 storage terminals across Australia and has access to product supply at another 12 terminals.
Caltex Australia's national network comprises 89 depots and about 2,000 service stations, including company-owned and franchised sites, resellers, independent operators, and Caltex Woolworth's co-branded outlets. The company also sells directly to commercial and industrial customers of all sizes, including transportation, aviation and agricultural enterprises. Caltex Australia supplies more than one-third of all transportation fuels sold in the country.
Updated: April 2013
Cautionary Statement