Chevron Corporation CVX announced its plan to move its Big Foot tension-leg platform (TLP) to the sheltered waters from the deepwater U.S. Gulf of Mexico. The decision was taken after the company spotted damages to subsea installation tendons.
Management apprehends the removal of the platform to end up hurting production from the Big Foot oilfield project. The company also added that production will not start by late 2015, as planned earlier.
Out of the 16 tendons − that were installed for securing the floating platforms − 6 sank and were lost. Chevron is now assessing the nature of the damage. However, there was no release of oil and no injuries at the time of the incident. The platform was also unimpaired.
The company revealed that more the extent of the damage to the tendons, the more the project will get delayed. The Big Foot project was expected to produce roughly 75,000 barrels of oil per day and 25,000 cubic feet of natural gas daily.
San Ramon, CA-based Chevron is one of the largest global publicly traded oil and gas companies, based on proved reserves. It is engaged in oil and gas exploration and production, refining and marketing of petroleum products, manufacturing of chemicals, and other energy-related businesses.
However, the ongoing oil price slump has affected Chevron’s cash flow, particularly at its upstream unit which is its largest earnings generating segment.
Weighing such factors, Chevron currently carries a Zacks Rank #3 (Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.
However, there are some better-ranked players in the energy sector. Of these, Pembina Pipeline Corporation PBA, LRR Energy LP LRE and WPX Energy Inc. WPX with a Zacks Rank #1 (Strong Buy) are to name a few.
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