TotalEnergies Takes Slice of Chevron's U.S. Offshore Pie

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Though the U.S. may be at odds politically with its European allies, French major TotalEnergies (Courbevoie, France) said it was establishing a new offshore partnership by buying into Chevron Corporation's (Houston, Texas) offshore assets in the Gulf of Mexico.

U.S. President Donald Trump upended widespread bilateral relations on his return to the White House by questioning NATO doctrines and disrupting global trade with sweeping tariffs. Domestically, his policies were viewed unfavorably by an energy sector fretting over lower prices and newly complicated supply chain logistics.

But on Monday, TotalEnergies said it acquired a 25% working interest in 40 separate federal leases held by Chevron in the U.S. territorial waters of the Gulf of Mexico. The leases cover some 385 square miles and include 13 blocks in the Walker Ridge basin, 18 in the East Breaks area and nine in the Mississippi Canyon.

"This transaction is in line with our consistent strategy of filling our exploration portfolio with low-cost and low-emissions options, and will significantly expand TotalEnergies' Offshore U.S. exploration acreage, combining a wide range of geological plays and prospectivity," said Kevin McLachlan, a senior vice president for exploration at TotalEnergies.

Terms of the acquisition were not disclosed. Chevron had no public comment on the deal. The company has been struggling, announcing plans last year to relocate its headquarters from a campus in San Ramon, California, to Houston, Texas.

The plans, disclosed in August, coincided with the retirement of several front-office staff, and the company later trimmed about 9,000 positions from its payroll, or about 20% of its global workforce. Leaning instead on robotics and artificial intelligence, Chevron said the cuts were necessary to stay competitive in the global market.

Chevron has plans to divest as much as $15 billion in assets from its global portfolio by 2028.

Meanwhile, the U.S. federal government expects total Gulf oil production to average 1.8 million barrels per day (BBL/d) this year, increasing only marginally to 1.81 million BBL/d in 2026. Gulf oil production averaged 1.77 million BBL/d last year.

New operations at 13 fields in the Gulf of Mexico are expected to begin this year, without which year-on-year production would decline from 2024. Of those, eight will be developed using tiebacks to existing infrastructure as upstream operators look to save capital.

TotalEnergies and Chevron already collaborate at fields in the Gulf of Mexico, with the Ballymore prospect achieving first oil earlier this year. Operations at Ballymore started in April, with production expected to peak at 75,000 BBL/d of oil and 50 million cubic feet of natural gas. The hydrocarbons will be carried to Chevron's Blind Faith floating production unit.

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