By Ernest Scheyder
MINNEAPOLIS, Sept 18 (Reuters) - A string of missteps at a$10 billion Angolan liquefied natural gas venture has hurtChevron Corp's reputation as a top-notch operator ofprofitable energy projects around the world.
Chief Executive Officer John Watson vowed Chevron will learnfrom the stumbles, which include multiple electrical fires,pipeline leaks, and even a worker's death after a rig collapsedlast summer. The company plans to have the LNG project up andrunning by next year.
"Ultimately, we're accountable for it," Watson said in aninterview with Reuters. "There have been some lessons learned onthat (Angolan) project. But I don't point fingers. This is ourresponsibility."
The frank comments, unusual for a major corporate leader,come as Wall Street pressures major energy companies to maintainor boost production to keep profits flowing - a goal madeincreasingly harder by the rising costs of finding remote oiland natural gas reserves.
The Angolan trouble led Chevron to create an internalproject management system to better track contractors andsubcontractors on major projects, Watson said. Chevron is thelargest stakeholder in the Angolan project, with partners thatinclude Total SA, BP Plc, ENI SpA andAngola's Sonangol.
"We've learned from the experiences at Angola LNG and otherprojects, working to make sure those same issues, or issues likethem, don't happen on the next generation of projects," he said.
Watson's comments on the Angola project should help assuageconcern the delay could cause the company to miss its 2014production goals, roughly 2.61 million barrels of oil equivalentper day.
"We're still on track to reach that," Watson said.
The Angolan mishaps will help Chevron as it moves forward onengineering and design for its Kitimat LNG project in BritishColumbia, Watson said, an indication Chevron is unlikely to pullthe plug even after Apache Corp quit.
Chevron is also nearing completion on two massive LNGprojects off the Australian coast to supply Asian markets.
SHALE THREAT?
Even as Chevron works on LNG projects, the rise of the NorthAmerican shale industry has boosted global supplies of naturalgas. Chevron is a major natural gas producer in Pennsylvania'sMarcellus region.
Yet the company is struggling to lock-in sales contracts forits Gorgon LNG plant in Australia, the world's most-expensiveLNG operation.
In Australia, seven LNG projects should be online by 2017,which, taken with the North American shale renaissance, haveraised concerns about global oversupply.
Brushing aside any worry, Watson referenced Japan, which isfazing out nuclear power, and China, with a rapidly risingmiddle class, as major customers. Chevron has said global LNGdemand will double from 2012 to 2025.
"We think the demand will be strong for LNG for many yearsto come," Watson added. "Many countries that don't have theseresources will continue to be major sources of demand." (Reporting by Ernest Scheyder; Editing by Terry Wade and AndreGrenon)
BP (BP.)
