Chevron’s recent advancement in oil extraction technology could significantly expand access to previously unreachable crude oil reserves, potentially adding up to 5 billion barrels to global production, analysts suggest.

On Monday, Chevron announced the successful commencement of oil production from its Anchor project, operating at pressures of 20,000 pounds per square inch—one-third higher than any previous well. This breakthrough involves a $5.7 billion investment and utilizes specialized equipment from NOV, Dril-Quip, and drillships provided by Transocean.

Bruce Niemeyer, head of Americas oil exploration and production at Chevron, confirmed that the company began pumping from the first Anchor well on Sunday, with the second well nearing completion. This advancement is significant for the industry, which faced severe challenges following the 2010 Macondo blowout in the Gulf of Mexico, a disaster that resulted in 11 fatalities and extensive environmental damage.

In response to past failures, the industry has developed new, robust drillships and equipment designed to handle the extreme pressures encountered in high-pressure fields. “The industry has done their bit to safely deliver the barrels, with the new technology,” said Mfon Usoro, a principal analyst at Wood Mackenzie focusing on Gulf of Mexico operations.

Chevron’s Anchor project, along with similar initiatives by Beacon Offshore Energy and BP, is set to produce an estimated 300,000 barrels of new oil and could unlock 2 billion barrels of previously inaccessible U.S. oil. “These ultra-high pressure fields are going to be a big driver for production growth in the Gulf of Mexico,” Usoro added.

The Gulf of Mexico, which has produced below its 2019 peak output of 2 million barrels per day, stands to benefit from this new technology. BP is also working on high-pressure projects, including the Kaskida field discovered in 2006 but previously stalled due to technology limitations.

The high-pressure, high-temperature technology not only holds promise for the Gulf of Mexico but also for offshore fields in Brazil, Angola, and Nigeria. “Brazil has major offshore developments that are prime candidates for future 20k technology application due to their complex high pressure, high temperature environments,” said Aditya Ravi, a Rystad Energy analyst.

Globally, this technology could impact over 5 billion barrels of known oil and gas resources, equating to approximately 50 days of current global production, according to Ravi. The Gulf of Mexico is expected to be the proving ground for these new advancements.

(Adapted from TheGlobeAndMail.com)

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