press release

Chevron Press Release - Project 'Genesis' Begins As Chevron, Exxon, Fina Give Green Light

NEW ORLEANS, June 19, 1996 -- Chevron U.S.A. Production Company and joint owners Exxon Company, U.S.A. and FINA said today they are proceeding with the Genesis Development Project, a new deepwater oil and gas project in the Gulf of Mexico.

Genesis, formerly called "Vancouver" or "Green Canyon" project, is located about 150 miles south of New Orleans on Green Canyon federal lease blocks 160, 161 and 205 in waters about 2,600 feet deep. The project cleared final joint-owner approvals earlier this month.

Production should start in late 1998 and peak in 2000 at about 55,000 barrels of oil and 72 million cubic feet of natural gas per day. Recoverable reserves are estimated in excess of 160 million barrels of oil equivalent over 15 to 20 years. The cost of the production facility and development drilling is projected at $750 million. Project operator Chevron holds a 56.67 percent interest. Exxon holds 38.38 percent and FINA 4.95 percent.

Under contract with Chevron, Spars International Inc. (SII) will design, build and install a "spar" based drilling and production structure. SII is a 50/50 jointly owned venture of J. Ray McDermott and Aker Oil and Gas Technology.

Genesis project leader Scott Young of Chevron said the joint owners believe the design will save money and time during development, yet perform as well as other deepwater production systems.

"These kinds of projects are costly and technically complex, so we've spent more than a year on front-end work," said Young, who indicated the owners and major contractors will work as an integrated team. "We have a lot of confidence in our team, our contractors and our project execution plan."

The development concept employs a cylindrical steel structure floating upright to support both drilling operations and production facilities. Air-filled compartments on the upper portion of the cylinder provide buoyancy while seawater-filled tanks on the bottom give weight and stability. The Genesis hull -- 122 feet across and 705 feet tall -- will be moored to the sea floor by 14 anchor lines. Atop the hull sits a drilling and production deck similar to a traditional shallow-water platform which will allow conventional access to production wells. Treated oil and gas will be pipelined to shore.

Aker Rauma Offshore in Pori, Finland, will provide the hull and anchor system as a subcontract to SII. Topsides will be fabricated in Morgan City, La., by J. Ray McDermott, who will also install and assemble the Genesis facilities. Nabors Industries Inc. will provide Genesis with a modified platform drilling rig for full drilling capability.

Updated: June 1996