Chevron Sanctions Development of Deepwater Jack/St. Malo Project in the Gulf of Mexico; Initial Development Cost of ~$7.5B
21 October 2010
Chevron Corporation has sanctioned development of the Jack/St. Malo project, its first operated project located in the Lower Tertiary trend in the deepwater US Gulf of Mexico. The Jack and St. Malo fields are located within 25 miles (40 km) of each other approximately 280 miles (450 km) south of New Orleans, Louisiana, in water depths of 7,000 feet (2,100 m).
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| The Lower Tertiary trend. Click to enlarge. |
By comparison, the water depth of BP’s MC252 well (of the Deepwater Horizon disaster) was approximately 5,023 feet (1,522 meters).
The initial development of the Chevron project will require an investment of approximately $7.5 billion. It will include three subsea centers tied back to a hub production facility with a capacity of 170,000 barrels of oil and 42.5 million cubic feet of natural gas per day. Startup is anticipated in 2014.
The Jack and St. Malo fields are estimated to contain combined total recoverable resources in excess of 500 million oil-equivalent barrels. Seven exploration and appraisal wells have been successfully and safely drilled at these fields since 2003. Chevron, through its subsidiary Chevron USA Inc., has working interests of 50% in the Jack field, 51% in the St. Malo field, and 50.67% in the host facility.
Chevron is one of the top leaseholders in the Gulf of Mexico, averaging net daily production of 149,000 barrels of crude oil, 484 million cubic feet of natural gas and 14,000 barrels of natural gas liquids during 2009.
Interesting tidbit: a Tesla rep told us they are being hampered by a Chevron patent covering fast charging. Apparently the method patented (pulse charge?) significantly shortens charge time for big packs like the Tesla 54kW.
Chevron, according to this source, is witholding the details of safe ultra high fast charge method. They claim they are at work on a secret, high tech, super-amazing battery or... well, y'know. Chevron finances a "grass roots" group that opposes Telsa's EVs on public roadways.
Again, according to source, funding for the group originates with Chevron.
Posted by: Reel$$ | 21 October 2010 at 05:10 PM
One of these days, free market economies may have to selectively limit the wild use of patent rights and associated royalties. Otherwise, a few corporations with very deep pockets will dictate what the world can have and cannot have.
Posted by: HarveyD | 22 October 2010 at 07:07 AM
If the US government forced companies to sell patents for 10 times their one-year royalties in cases like this, there would be zero incentive to use patents that way. Refuse to license it, revenue is zero and it goes for free.
Posted by: Engineer-Poet | 22 October 2010 at 08:36 AM
I think you are both on track. The same issue is huge with genome patents - or rather specific gene patents awarded to pharmas for human genes. This is a major problem for biogenetics which could easily become controlled by small biotech cartels.
Of course government sale of patents used to block competition would have to apply to government projects as well - to pass the equal protection doctrine. It's doubtful DOD would be happy with this.
Posted by: Reel$$ | 23 October 2010 at 08:29 AM
Temporal Limited Patent Rights have led the USA to the highest Standard of Living on the Planet.
Can they be abused? Certainly, but not for long. There are always other ways to skin a cat, and eventually time runs out on any Patent holder. After all why should a Patent be temporally limited? Why should not property rights be granted in perpetuity? Such was the foresight and genius of the founders and writers of our Constitution, to anticipate human nature, and prevent the supression of innovation.
Only people with no respect for others property rights, like the Chinese Communists and certain domestic followers of the same persuasion, seem to object. They never consider the consequences of removing the economic incentives to innovate.
For EV auto aficionados, the supposedly egregious example of the purchase of Nickle metal hydride ion battery patents by an Oil firm and subsequent non-use, is their gleaming beacon. But is it, really?
It did not prevent altogether better alternatives, and may have actually spurred on R&D, in that direction. Patent rights actually suppressed Ni metal hydride innovation. Clearly Ni Metal-hydride Ion batteries are now passé; and have been replaced by Li-Ion varieties, with clearly superior attributes. Who is to say that improved generations of Ni-Metal hydride batteries could not have been developed to compete with Li-Ion?
The Oil firm paid its money for the patents, and then received nothing in return. What a great business decision!
Posted by: Stan Peterson | 23 October 2010 at 09:14 AM
The blocking of NiMH traction battery technology for road vehicles bought Chevron (and COP, and XOM) at least a decade of respite from competition by electric vehicles. The loss of licensing revenue paid off hundreds of times over in gains from petroleum production, refining and sales.
Posted by: Engineer-Poet | 23 October 2010 at 11:14 AM