Gorgon Half Completed. Costs Could Grow, Executive Says (Australia)

 Gorgon natural gas development, located offshore Western Australia, and one of Chevron’s most important projects, is 50 pct complete and still on track to deliver first gas in 2014, Chevron’s executive said at an industry conference, Reuters reports.

The final investment decision for the project, one of the world’s largest natural gas developments, was made in 2009, when the company estimated it would take US$37 billion for the first phase of development.

Brian Smith, Chevron’s General Manager of Operations in Australia told Reuters that the numbers are still the same, but added that the project cost estimates could change in the future.  “…The exchange rate has gone up, it’s higher than when the project was approved,” Smith said.

The Greater Gorgon Area’s projected natural gas resources are equivalent to 6.7 billion barrels of oil. The Gorgon Project is operated by an Australian subsidiary of Chevron and is a joint venture of the Australian subsidiaries of Chevron (47.3 per cent), in joint venture with the Australian subsidiaries of ExxonMobil (25 per cent), Shell (25 per cent), Osaka Gas (1.25 per cent), Tokyo Gas (1 per cent) and Chubu Electric Power (0.417 per cent). Chevron recently celebrated its 60th anniversary since entering Australia’s upstream oil and gas sector.

California-based supermajor on November 2, reported third quarter 2012 earnings of $5.3 billion, a decrease of $2.5 billion compared to the $7.8 billion earned in the 3Q 2011.

The oil major explained the numbers were lower than the previous year ones because of the decreased oil prices and reduced oil and gas production in several oilfields.

Watch Chevron’s Gorgon video on Youtube:

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Offshore Energy Today Staff, November 13, 2012