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UPSTREAM
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United States
ChevronTexaco was the third-largest hydrocarbon
producer in the United States in 2004, with daily net
production of more than 500,000 barrels of crude oil
and natural gas liquids and nearly 1.9 billion cubic
feet of natural gas. On an oil-equivalent basis, these
volumes represented about one-third of the company’s
worldwide production for the year. The U.S. portfolio is
anchored by mature assets concentrated in the Gulf of
Mexico, California, Louisiana, Texas, New Mexico and
the Rocky Mountains.
During 2004 the company sold approximately 300
properties which, along with assets sold in late 2003,
accounted for about 30,000 barrels of oil-equivalent
production per day, or less than 5 percent of the average
daily production for the year in the United States. These
properties were no longer considered strategic to the
upstream asset portfolio. Certain other properties, representing
less than one percent of daily U.S. production,
are earmarked for sale in 2005.
In September 2004, Hurricane Ivan hit the Gulf of
Mexico region, causing significant damage to production
facilities and pipelines. The damages lowered 2004
average daily net oil-equivalent production by 21,000
barrels. Before the hurricane struck, the company evacuated
and later remobilized more than 1,600 workers in
the Gulf of Mexico without a safety incident.
U.S. Upstream received a number of health, environment
and safety awards during 2004, including the
Bureau of Land Management Oil and Gas Operator of
the Year Award in the San Joaquin Valley; the California
Department of Oil and Gas Clean Lease Award; the
New Mexico Energy, Minerals and Natural Resources
Department Oil Conservation Division Environmental
Merit Award; recertification for the Wyoming Workers
Safety Voluntary Protection Program OSHA Star Award
at the Whitney Canyon/Carter Creek facility; a Minerals
Management Service (MMS) Safety Award for Excellence
(SAFE) for Gulf of Mexico, New Orleans district and
an MMS SAFE for the Gulf of Mexico, Houma district;
several MMS corporate leadership awards; and a nomination
for the MMS 2004 National SAFE.
CALIFORNIA
Operating primarily in the San Joaquin Valley,
ChevronTexaco again ranked No. 1 in oil-equivalent
production in California in 2004, with average net daily
production of 217,000 barrels of crude oil, 108 million
cubic feet of natural gas and 4,000 barrels of natural
gas liquids. With 84 percent of the crude oil production
considered heavy oil (API gravity of 22° or below), heat
management continues to be a major operational focus
in the recovery of these reserves.
The three major San Joaquin Valley crude oil
fields – Kern River, Midway Sunset and Cymric – had
combined net oil-equivalent production of 170,000 barrels
per day in 2004. The Kern River Field is a mature
steamflood operation with net oil-equivalent production
exceeding 95,000 barrels per day during the year.
Activity at Kern River focused primarily on an accelerated
drilling program for 200 infill wells. An infill program
with another 100 wells is planned for 2005.
Diatomite Reservoirs
ChevronTexaco has crude oil resources in diatomite
reservoirs at Lost Hills, Cymric, McKittrick and Midway
Sunset fields. Formed from the skeletons of countless
prehistoric microorganisms called diatoms, diatomite is
a reservoir rock with very high porosity and low permeability
that can be difficult to produce.
In the central waterflood area of the Lost Hills Field
(a light oil field), the company drilled 19 production
wells and 69 injection wells during 2004 and increased
water injection rates from 88,000 to 134,000 barrels a
day. Combined with additional workover and stimulation
jobs in the second half 2004, production at Lost
Hills increased about 5 percent in 2004. At the north Lost
Hills waterflood project, the company drilled 105 injection
wells and 36 producing wells during 2004. Plans for
2005 include 90 injection wells and 78 producing wells.
Waterflood technology is being employed in the region
to improve recovery of the field’s hydrocarbons. Net oilequivalent
production for 2004 in the Lost Hills area
averaged 20,000 barrels per day, an increase of 9 percent
from 2003 levels.
The company also has diatomite reservoirs containing
heavy crude oil. Producing hydrocarbons from this
type of formation presents unique technical challenges.
At Cymric Field, a recovery technique utilizing a highpressure
cyclic steaming process has been employed with
demonstrated significant results. The 1Y Antelope project
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