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Chevron Update: US Production up 5%, International Production Down 4%

In an interim update on its first-quarter activities, Chevron reported that its combined oil and natural gas production for January and February in the US increased 5%, driven by the on-going restoration of storm-related shut-in volumes in the Gulf of Mexico (GOM).

Chevron expects first-quarter production in the GOM to climb back to 200,000 barrels of oil equivalent per day, up from 160,000 in the fourth quarter, and increase of 25%. Total US oil and gas production averaged approximately 753,000 barrels of oil equivalent per day, up from an average of 717,000 bpd in the full fourth quarter.

However, the company stated that combined international liquids and natural gas production—which accounts for about two-third of Chevron’s upstream output—declined 4%. International production dropped to 1.89 million boed in the January-February period from an average 1.97 million boed in the fourth quarter of 2005.

Chevron is thus seeing a combined drop in global production of 1.6% in the first two months of the year, compared to the fourth quarter of 2005.

Earlier in the week, Nexen, a partner with Chevron in the Knotty Head deepwater project in the Gulf of Mexico, cut its estimate of the resource held in the ultra-deep field by up to 50%, based on the conclusion of exploratory drilling.

The partners in the field (Chevron, Nexen, Anadarko and BHP Billiton) had originally estimated Knotty head to hold 350 million to 1 billion barrels of oil. Based on the drilling data, that estimate is now 200 to 500 million.

The field is located in approximately 3,500 feet of water, and the well was drilled to a total depth of 34,189 feet—the deepest yet drilled in the Gulf of Mexico.


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