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Chevron to spend $7.5B on gulf oil project

HOUSTON, Oct. 21 (UPI) -- Chevron Corp. said Thursday it is going ahead with a $7.5 billion project to develop two deep-water oil fields in the outer rim of the Gulf of Mexico.

Chevron said in a release on its Web site it expects to begin extracting crude oil from the Jack and St. Malo fields, about 280 miles southwest of New Orleans, in 2014.

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To reach the oil, discovered about seven years ago, Chevron will have to send its equipment down about 7,000 feet to the ocean floor and then drill up to another 4 miles into the Earth from there.

"The Jack/St. Malo project builds off our success in the U.S. Gulf of Mexico and will enable Chevron to help meet future U.S. energy demand while delivering a safe and reliable deep-water operation," Gary Luquette, president of Chevron North America Exploration and Production Co. said.

The offshore drilling complex is expected to produce 170,000 barrels of crude oil and 42.5 million cubic feet of natural gas per day.

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