Hess Corporation announced that they will proceed with the development of Tubular Bells, a deepwater oil and gas project operated by Hess in the Gulf of Mexico.

Discovered in 2003, Tubular Bells is located approximately 135 miles southeast of New Orleans in the Mississippi Canyon area. The field lies in water depths ranging from 4,300 to 4,600 feet. The plan initially calls for three subsea production wells and two water injection wells from two subsea drill centers tied back to a third-party owned spar production facility, the first of its kind to be constructed entirely in the United States. Drilling is scheduled to begin in 2012 and initial production is expected in 2014, subject to the receipt of necessary government permits.

Annual gross production is expected to peak in the range of 40,000-45,000 barrels of oil equivalent per day. Total estimated recoverable resources for Tubular Bells are estimated at more than 120 million barrels of oil equivalent. The development is estimated to cost $2.3 billion, with additional commitments for production handling, export pipeline, and oil and gas gathering and processing services. Following BOEM approval of the recent assignment of BP’s interest, Hess will hold a 57.14 percent interest in the field, and Chevron U.S.A. Inc. will hold the remaining 42.86 percent interest.

Hess Corporation, with headquarters in New York, is a global integrated energy company engaged in the exploration, production, purchase, transportation and sale of crude oil and natural gas, as well as the production and sale of refined petroleum products.

Source: Hess Corporation, October 25 , 2011