HOUSTON (Reuters) – Chevron has started oil and gas production from a project in the U.S. Gulf of Mexico, the oil major said on Monday, bringing the company a step closer toward its goal of growing production from the ocean basin by 50% this year.

The $1.6 billion project called Ballymore, located about 160 miles southeast of New Orleans, is composed of three wells that is expected to produce up to 75,000 barrels of oil per day.

Chevron aims to grow oil and gas production from the Gulf to 300,000 barrels of oil equivalent per day in 2026, and at the same time, it is working to cut up to $3 billion in costs across the business. Instead of building a new production platform for Ballymore, the wells will transport oil and gas back to an existing platform, which the company said will allow it to increase production at less expense.

“Ballymore is interesting in that it’s a tie-back to an existing facility, which has allowed us to bring production to market more quickly,” said Bruce Niemeyer, president of Americas exploration and production, in an interview.

Chevron’s First Project in Norphlet

The project is also Chevron’s first in a geological formation of the Gulf called Norphlet, where the oil and gas industry has historically had fewer discoveries than in other parts of the ocean basin, he added.

Advancements in technology are key to expanding resource exploration, such as the use of ocean bottom nodes, which allow geophysicists to collect better data underneath the ocean floor, Niemeyer said.

Chevron is the operator of Ballymore with a 60% interest, while co-owner TotalEnergies has 40%. Ballymore holds an estimated 150 million barrels of oil equivalent in potentially recoverable resources.

The company owns 370 leases in the Gulf of Mexico and expects to participate in a lease sale this year by U.S. President Donald Trump’s administration, Niemeyer said.

The Ballymore start-up comes after Chevron announced first oil in August at Anchor, a Gulf of Mexico project that is a technological breakthrough with the ability to operate in deepwater pressures of up to 20,000 pounds per square inch.

(This story has been corrected to say that Ballymore will produce 75,000 barrels of oil per day, not barrels of oil equivalent, in paragraph 2)

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(Reporting by Sheila Dang in Houston; Editing by Chizu Nomiyama)