Chevron Gets Go Ahead For Gorgon Oil Field

One of the world's largest gas fields, Gorgon, will be developed off the north-west coast of Australia, energy-titan Chevron announced today. China, Japan and South Korea have already signed up for export contracts.

The final US$37-billion investment plan sealed between Chevron, Shell and ExxonMobil on the Gorgon natural gas project marks an historical milestone for both the oil consortium and Australia. Gorgon, the biggest ever resource investment in Australia, helped the three energy-giants secure a new source of growth in the coming four decades, while it helped the Rudd government safeguard its sliding popularity by pampering the public with an expected export revenue of US$300 billion.

Chevron will own an almost 50 percent share in the field and will be the project operator. The Gorgon project is vital to Chevron which reported more than 70 percent drop in its second quarter profits to less than US$1.8 billion from nearly US$6 billion in the previous year, as a result of lower prices for refined products, crude oil and natural gas. The California-based company also posted a 64 percent decline in net profit for the first quarter of this year.

With much scrutiny surrounding Chevron's methods following accusations of environmental misconduct from the nation of Ecuador, the project will be operated in a way that aims to make as little impact on the environment as possible. For example, much of the carbon dioxide emitted from the project is to be buried beneath Barrow Island to reduce its contribution on global warming.

To gain the maximum economic return from the underground natural gas reserve, the Chevron-led consortium had fought a tough battle against environmentalists and had undergone, "a rigorous and thorough environmental assessment that culminated with some of the most stringent conditions imposed on a major project anywhere in the world," Chevron said in a statement. Challenged by public discontent, the Western Australian government granted several production licences to the Gorgon project with strict conditions imposed. One of these conditions stipulates that the project must not damage more than 3 percent of the coral off Barrow Island.

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