In my recent letters I’ve discussed the progress we’re making on many of the large major capital projects that will be coming online and driving our production growth over the next few years. This growth wouldn’t be possible, however, without continued strong performance in our base business assets.
These assets play an important role in providing the production and cash flow that helps fund our future growth opportunities. This month I want to provide an update on some of our key base business operations.
• Thailand is delivering strong performance through its well factory efficiency programs. This manufacturing model allows us to move rapidly from prospect identification and platform installation to drilling and bringing new wells to production. A total of 18 wellhead platforms are planned to be installed, with over 500 development wells anticipated to be drilled this year. Our company is the top natural gas and crude oil producer in Thailand, supplying about 40 percent of the country’s natural gas demand.
• In the Mid-Continent Business Unit we have a mix of legacy conventional assets and new shale and tight resource growth in the Midland and Delaware Basins. With 27 rigs running, we are on pace to drill more than 500 wells in the Permian this year. Already among the largest producers in the Permian, we have a large undeveloped leasehold and expect continued growth in the basin for years to come.
• Production efficiency continues to be high in the San Joaquin Valley Business Unit (SJVBU), where we have an active reinvestment program at our three major operating areas – Kern River, Temblor Thermal Area and West Central California. Over 40 drilling and workover rigs are active in the SJVBU, allowing us to maintain a very low production base decline rate.
In support of our operations, last month, Chevron Power and Energy Management (CPEM) joined Gas and Midstream. CPEM integrates Chevron Global Power and Chevron Energy Solutions into one reporting unit focused on delivering power and energy efficiency expertise to support the growing needs for power across the enterprise.
As you go about your daily work activities please continue to maintain a sense of vulnerability and ensure your key safeguards are in place, effective and functioning. In more than 80 percent of our serious incidents and near misses we find that either the hazards were not recognized or that a critical safeguard was not verified to be in place or was not effective or was not functioning.
Effective pre-job planning and pre-job hazard assessment is a crucial step in reducing the frequency of serious incidents. The Front Line Field Supervisor program and video case studies are an excellent source of information to assist leaders in this area.
Until next month,