Anchor's aweigh as Chevron gives nod to US Gulf of Mexico development

Chevron given the green light to the Anchor development in deepwater US Gulf of Mexico. This is Chevron’s first greenfield final investment decision as an operator since its sanction of Big Foot and Jack/St Malo in 2010.

Justin Rostant, an analyst with Wood Mackenzie’s Gulf of Mexico team, said: "The Anchor project reaching FID marks a major milestone for advanced technology in the US Gulf of Mexico and the wider offshore industry.”

Anchor is the first-ever ultra-high-pressure project requiring 20-ksi operating pressure to reach FID and this will kickstart the next wave of investments in US Gulf of Mexico.

Rostant said: “Chevron’s sanction of the Anchor project shows that the US Gulf of Mexico still offers attractive investment opportunities for large greenfield developments.

“While over 80% of projects sanctioned in the last five years are shorter-cycle subsea tiebacks, standalone developments like Anchor are still able to compete for development capital.

“Anchor is the first of three 20-K projects that Wood Mackenzie expects to reach FID within the next 18 months. We estimate that these three projects combined hold approximately 1 billion barrels of oil equivalent in reserves and will require over US$10 billion of capital investments.”

Wood Mackenzie values Anchor at US$1.5 billion (NPV 10) with a development-cycle breakeven of US$51/bbl (PV 10, Brent).