ExxonMobil and 50/50 partner Statoil will commence development on the Julia oil field in the US Gulf of Mexico, the companies announced on 7 May 2013. The project's capital costs could total more than US$4 billion.
“The development of Julia will provide a new source of domestic energy and well-paying jobs over the next several years,” said Neil W. Duffin, president of ExxonMobil Development Company. “Access to resources such as Julia will contribute to US energy security for many years to come.”
The Julia field, discovered in 2007, is thought to contain approximately six billion barrels of resource in place. Exxon said the initial development phase will be designed to produce 34,000 bo/d.
In 2012, ExxonMobil settled a lawsuit with the US Government over the Department of the Interior's cancellation of Exxon's Julia leases, which the DOI said expired after the company failed to demonstrate a commitment to production. The Julia partners have since been granted an SOP (suspension of production) order.
Statoil's Jason Nye, senior vice president of US Offshore, said at a press conference at OTC in Houston on Wednesday morning that the partnership expects Julia to produce for the next 40 years and to have multiple phases.
Nye broke down the the numbers associated with Julia's high cost, $4 billion, saying that the wells to be drilled will be long and difficult. Nye priced each well, of the six to be developed during the first phase, at $230 million. Additionally, the partnership plans to tieback to Chevron and Statoil's Jack & St. Malo field, 15 miles away.
During the conference, Nye discussed the possibility of using either water or gas injection to boost recovery at the field, although he said plans for that would not happen until phase three or four.
Exxon said that Julia project front-end engineering design has been completed and the engineering, procurement and construction contracts have been placed. Drilling operations are expected to begin in 2014 with first oil to follow in 2016.
“Julia is one of the first large oil discoveries in the ultra-deepwater frontier of the Gulf of Mexico,” said Duffin. “This resource is located more than 30,000 feet below the ocean’s surface. Enhanced technologies will be deployed to ensure the safe and environmentally responsible development of this important energy resource.”
The Julia field comprises five leases in the ultra-deepwater Walker Ridge area of the Gulf of Mexico, 265 miles southwest of New Orleans. The blocks are WR-584, WR-627, WR-628, WR-540 and WR-583. ExxonMobil, the operator, and Statoil Gulf of Mexico LLC each hold a 50% interest in the Julia unit.