Chevron is pressing on in hope with new projects in the Gulf of Mexico. Its latest announcement, which came Thursday, was for the $4bn development of its Big Foot project in the deep water.
This follows its announcement in October to move forward on the $7.5bn development of two large fields in the Gulf of Mexico. That previous announcement represents the largest investment in the Gulf of Mexico since the BP oil rig disaster in April and is the strongest signal that companies expect the region’s reserves will continue to be produced in spite of the spill.
Chevron has been the most aggressive in signaling its continued commitment to the Gulf, despite concerns over permitting that have many long-time investors in the Gulf concerned about its future. Partly this is because of its overall aggressive approach to exploration and production.
The US’s second biggest oil company plans to boost capital expenditure to $26bn in 2011, putting its spending near that of industry leader ExxonMobil despite being significantly smaller. The spending plan, a $4.4bn increase from 2010, marks the most Chevron has ever budgeted for capital expenditure. And it is notable at a time that many in the industry are taking a more conservative approach – moving out of the Gulf or back to home territories from increasingly nationalistic and difficult-to-work-in oil-rich states around the world.
Analysts say Chevron has a rich pipeline of projects to exploit and has built up a strong position in the Gulf. It makes sense for it to move forward to exploit this. The company just has to hope Macondo has not spooked regulators in the US and elsewhere enough to slow down its plans.