Chevron, Shell to share rigs for gulf drilling

Feb. 14, 2000
Chevron U.S.A. Production Co. and Shell Exploration & Production Co. have agreed to share rigs to jointly drill two exploratory deepwater wells in the Gulf of Mexico this year.

Chevron U.S.A. Production Co. and Shell Exploration & Production Co. have agreed to share rigs to jointly drill two exploratory deepwater wells in the Gulf of Mexico this year.

Chevron also will use a Shell-contracted rig to drill a third well in a joint venture with Texaco Inc.

That program represents half of the six deepwater exploratory wells that Chevron plans to drill in the gulf during 2000, officials said.

"This agreement is a real win-win for Chevron and Shell. It supports both companies' exploration efforts and rig needs in the deep water this year," said Andrew L. Hardiman, vice-president of Chevron's deepwater gulf business unit.

Drilling efficiencies

A key element to the agreement is Shell's proprietary Drilling the Limit work-flow process aimed at cutting drilling time and costs by "planning the perfect well and eliminating the obstacles to achieve it," said a company official.

The company has used that process to "cut drilling times in half with incredible savings," she said. It freed up time slots to make the contracted rigs available to Chevron, which also plans to use that process on its wells.

"With this new effort, the companies hope to set new benchmarks for low-cost deepwater drilling," Hardiman said.

As part of their agreement, Chevron at some point will provide Shell access to Transocean Sedco Forex Inc.'s dynamically positioned Discoverer Deep Seas drillship, if needed. "We don't have a dynamically positioned rig under contract now. All of our rigs are anchored," said a Shell representative.

In 1998, Chevron and Shell worked together to set a deepwater drilling record on the Gamera prospect in 7,718 ft of water on the Atwater Valley Block 118.

Wildcat program

Under the latest agreement, Noble Drilling Corp.'s Jim Thompson semisubmersible, contracted to Shell, will spud the initial exploratory well in 4,800 ft of water on Chevron's Roy prospect on Mississippi Canyon Block 988 by the end of April. Shell has an interest in that prospect, with Chevron as operator. In July, the Transocean Marianas semisubmersible, under contract to Shell, is scheduled to spud the initial well on Chevron's Hurricane prospect in 2,000 ft of water on Ewing Bank Block 1010.

With a majority interest in that prospect, Chevron will be operator on that and any subsequent wells. Its partners include Shell and Agip Petroleum Exploration Co. Chevron also will use the Transocean Marianas sometime in May to spud an exploratory well in 4,900 ft of water on its Poseidon prospect on Mississippi Canyon Block 772. Chevron and Texaco each hold 50% interest in that large structure, located 21 miles west of the Crazy Horse discovery and 24 miles east of Shell's prolific Mars project.