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Chevron boss in ‘exciting’ times

The Australian: Chevron boss in ‘exciting’ times

Nigel Wilson, Energy writer | April 07, 2008

ROY Krzywosinski is formally head of Chevron’s Australasian strategic business unit.

But his real job is to turn Chevron’s huge undeveloped northern Australian gas resources into products, headlined by the long-running Gorgon LNG development.

The Western Australian Environment Protection Authority, not an organisation overly enthusiastic about a major industrial plant in a class A nature reserve on Barrow Island, has given Chevron and its partners, Exxon Mobil and Shell a bit of a break. Instead of restarting the clock on environmental assessment, the EPA has decided a lesser, but still very rigorous review, will be made of the plan to lift Gorgon output to 15 million tonnes a year.

For Krzywosinski, a 48-year-old native of Michigan, it means he begins his Perth-based job with a clear path to lead Gorgon to “final investment decision” late next year or early 2010.

A higher level of environmental assessment may have led to his first major public task being to announce that Gorgon, on which more than $1 billion has been spent in drilling, appraisal and engineering design costs, was being shelved.

Krzywosinski is no stranger to Australia, having worked previously in Brisbane and Port Moresby when Chevron was operator for an earlier version of plans to commercialise PNG’s oil and gas reservoirs. But his new job in WA follows a stint as president of Chevron’s project resources company in Houston, responsible for the giant’s worldwide major capital project portfolio, which suggests he is well set on Chevron’s corporate executive ladder.

His job description in Perth includes responsibility for Chevron’s upstream interests in Australia and the Philippines.

This includes the oil production operation on Barrow Island, Australia’s longest operating onshore oil field, and nearby Thevenard Island, interests in the North West Shelf Venture, Australia’s biggest resources development, the emerging Browse LNG project and the Malampaya gas to power project in the Philippines.

That’s not a bad management haul at all. But add to them the Gorgon project and the recently announced Wheatstone LNG and domestic gas proposal and he will not find time for grass to grow under his feet.

The new boss reflects that it’s probably never been more exciting in the energy business.

That applies globally but more particularly in Western Australia, which is on the brink of decisions that will lead to billions of dollars of investment in leading-edge technology to deliver export LNG and domestic gas projects to sustain the nation well into the second half of this century.

Krzywosinski accepts that in the wider world there has been some criticism of the long delay in bringing Gorgon to fruition. But he insists that once again the joint venture is aligned, pointing out that most similar arrangements ebb and flow in the strength of their alignment similar to an hour glass. He says that now the three Gorgon proponents are agreed that the design should be increased to an initial 15 million tonnes a year output on the same footprint as the currently approved project, there is no reason to suggest the current review of the alignment should produce any surprises.

When it is suggested the Wheatstone project is little more than “a project by media release”, Krzywosinski is firm. Yes, it is true the initial announcement is a single train of up to 5 million tonnes annual output and, yes, that’s very small in the scheme of LNG things these days.

But consider that apart from gas reserves committed to Gorgon, Chevron has well up to 20 trillion cubic feet of uncommitted gas on the North West Shelf, then a 100 per cent owned LNG and domestic gas project makes a lot of sense.

Krzywosinski is aware that Woodside’s $12 billion Pluto development is based on reserves of only around 5tcf and that Woodside claims it will be able to supply gas from other fields in the North West Shelf area for processing at Pluto.

So Wheatstone will not be an orphan as a small initial reserves development concept. There is plenty of gas available and there is also the technology available to consider seriously development concepts that would have been thought outlandish even a few years ago.

http://www.theaustralian.news.com.au/story/0,25197,23494242-5005200,00.html

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