Chevron Remains Committed to Deepwater Drilling
I caught up with Chevron’s vice president for global exploration this week to ask him what impact the BP well disaster and the drilling moratorium in the Gulf of Mexico would have on his company’s plans for future deepwater development. “There is an easy answer,” the Chevron vice president, Bobby Ryan, said without hesitation. “They have not changed.”
Chevron, the second-largest American oil company after Exxon Mobil, is one of the largest deepwater explorers in the Gulf of Mexico, and also has major deepwater projects in Europe, Asia and West Africa. The six-month drilling moratorium instituted by the Obama administration following the April 20 explosion of the Deepwater Horizon has suspended work on five Chevron deepwater wells. “Our plans are, the day that the moratorium is lifted, to go right back to the prospects we were drilling at the time work was suspended, as well as the other prospects that are in our queue,” he said. Mr. Ryan conceded that he and other Chevron executives do not know what new regulations will be imposed by the administration and Congress in the aftermath of the BP disaster. “We’d like to believe we will be back on track soon,” he said.
A six-month delay, assuming that the moratorium is not prolonged, must be put in perspective, he said. “It’s a long-term business,” he noted. The operations involved in completing a deepwater well project can take 15 years between initial evaluation, drilling and initial production. “It’s a fair assumption people could make that costs will go up because permits will take longer,” he acknowledged. But work on next year’s business plan is continuing normally. “I can tell you with confidence that basically nothing has changed,” he added. “We’re committed to deepwater.”