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It May Take Blind Faith

   "It's mass disruption out there."
   That's how Richie Miller, business developer for offshore data firm VeritasDGC, described the knocked-out oil and gas infrastructure in the Gulf this fall. But even as dozens of rigs were disabled or just shut down, companies continued to invest in major projects just offshore, driven in part by a provision of the new Energy Policy Act of 2005 that takes less of a federal royalty bite out of Gulf of Mexico production.
   Chevron announced on Monday, Nov. 7, that it has begun construction of a floating production facility to be installed in the Tahiti Field which is expected to achieve first production by mid-2008. Phase One, at a cost of $1.8 billion, was approved in August by Tahiti joint venture partners Chevron, Statoil and Shell. The field is located in the deepwater U.S. Gulf of Mexico approximately 190 miles (306 km.) south of New Orleans.
Paris-based oil, gas and petrochemical engineering, construction and services firm Technip is fabricating the Chevron Tahiti facility's hull and mooring systems at its yard in Pori, Finland, while the topside modules will be fabricated by Technip's Corpus Christi, Texas, subsidiary Gulf Marine Fabricators, whose south yard is pictured here.

   On Oct. 10, Chevron announced a $900-million investment in exploration of the Blind Faith field, in which it holds a 62.5-percent interest. Kerr-McGee holds the rest.
   This field is in 7,000 ft. (2,134 m.) of water, but 30 miles (48 km.) closer to New Orleans, in blocks 695 and 696 of Mississippi Canyon. Blind Faith has a potential 100 million barrels of oil-equivalent hidden in its Miocene sands, at depths approaching 24,000 ft. (7,315 m.). Initial production, to begin in 2008, is expected to be approximately 30,000 barrels of oil per day and 30 million cubic feet of gas per day, but capacity will be 45,000 barrels and 45 million cu. ft., respectively.
   While there are calls for diversifying the geography of the nation's energy portfolio, projects like this only reinforce the notion that geology trumps geography. After all, that's why there are thousands of platforms in the region. They're administered by the Minerals Management Service (MMS), part of the U.S. Dept. of the Interior, which oversees 1.76 billion acres (more than 712 million hectares) of the Outer Continental Shelf (OCS). States see a good share of annual MMS revenues, which in fiscal 2005 reached $1.7 billion. Among the recipients of that total, Louisiana gets more than $32 million, Alabama more than $15 million, Texas nearly $16 million and Mississippi just over $1.8 million.
   As the oil and gas game proceeds, companies like Chevron are still making moves in the next big arena: liquefied natural gas (LNG). And they're making those moves in the heart of the Gulf as well.
   On the same day it announced its Tahiti project, Chevron announced it had secured pipeline shipping capacity with a Kinder Morgan Energy Partners subsidiary to move approximately half of the natural gas from its Sabine Pass LNG terminal in Cameron Parish, La. — aka ground zero for Hurricane Rita.
   Yet another LNG application has landed on the desk of the Federal Energy Regulatory Commission, this one for Chevron's Casotte Landing project, to be located adjacent to its heavily damaged Pascagoula Refinery in Jackson County, Miss. In an interview with Site Selection a year ago, Joe Naylor, vice president for planning and strategy at then-ChevronTexaco Global Gas, said "interesting synergies might exist" by placing an LNG terminal at the Pascagoula site. "It would enable a feed to the refinery," he said, "and access to some of the energy systems around it."

   "Chevron has a long and proud history in Mississippi where it has safely owned and operated the Pascagoula Refinery for more than 40 years," said Roland Kell, Pascagoula Refinery general manager. "We look forward to building on this legacy."
   The moves come as policy makers address possible new OCS development: Currently, 85 percent of all federally controlled coastal waters are off-limits to energy production. Asked his view of the promise offshore energy development holds for his region's economy, former Litton Industries CEO Jerry St. Pe of Pascagoula says he keeps a close eye on the rig construction and repair market. "There's an industry that's going to have to replace most of its assets," he says. "We're already seeing signs of not only rebuilding offshore infrastructure, but our being in position to service it."
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