The head of Chevron Corp.'s division that was created to run its recently acquired Marcellus shale natural gas interests in Pennsylvania said Fayette County is at the center of its long-term business plans and local hiring will gradually increase in the coming years.

Bruce Niemeyer, vice president of Chevron's Appalachian and Michigan Strategic Business Unit in Moon Township, discussed the corporation's plans to grow its Marcellus business and other industry developments at a Fayette Chamber of Commerce.

The business unit was created to manage the Marcellus shale property leases that Chevron acquired from Atlas Energy in February and run drilling operations.

Chevron acquired all of Atlas's Marcellus leases and wells, but Atlas retained and continues to operate its shallow gas wells, Niemeyer said, adding that Chevron hired about 350 Atlas employees across the state. Chevron's acquisition included about 30 active Marcellus wells.

Chevron started a $3 million expansion of its field office in Smithfield, which also was part of the acquisition.

Last week, the company bought 228,000 acres of Marcellus shale leases containing 5 trillion cubic feet of gas mostly in Somerset County from Chief Oil and Gas and the investment firm of Tug Hill, which are both based in Dallas, Texas. The transaction included about 50 wells in various stages of drilling, completion and production.

That purchase doubles the Marcellus Shale acreage in Chevron's portfolio, Niemeyer said.

The current complement of 150 employees at the Smithfield office will gradually grow and half of the 70 wells Chevron plans to drill in the state this year will be in Fayette County, Niemeyer said, adding that Atlas drilled some of those wells before the acquisition.

"Fayette County is the center of our Marcellus universe," Niemeyer said.

Chevron plans to hire 140 people this year, but most people working at its well sites are employed by contractors, he said.

For each Chevron employee, there are three or four employees of contractors working for Chevron.

Those contractors use their own equipment and separate crews to work on each stage of developing a well, Niemeyer said.

One crew drills the 7,000- to 8,000-foot deep vertical part of a well and another crew drills the 2,000- to 5,000-foot horizontal part of a well, he said. Other crews handle the completion, reclamation and production phases.

Chevron's contractors currently use six drilling rigs, but 11 rigs eventually will be in use, Niemeyer said.

Many people working for contractors are from other states and have well-drilling experience, but Chevron believes those companies will hire local people when more programs are developed to train people to work at well sites, he said.

Chevron employs engineers, geologists, geophysicists, construction supervisors and production and operation supervisors who oversee work in the field and accountants, real estate agents, attorneys and office personnel who work behind the scene, Niemeyer said.

About 80 percent of the Smithfield office staff was hired locally and future hiring will be done gradually, he said.

The company stresses working safely and not harming the environment, and looks for employees capable of carrying out those objectives, Niemeyer said. Contractors also are expected to meet those expectations, he said.

"There is an economic benefit from Marcellus shale development, but it should not come at a cost to people or the environment," he said.

Responding to questions about more wells being drilling in Greene and Washington counties than in Fayette County, Niemeyer said the gas in Washington County is known as "wet gas" because it contains liquid hydrocarbons that give it a higher heating value or British thermal unit (BTU) content.

Wet gas sells at higher prices, but requires more treatment, he said.
Chevron primarily focuses on areas, such as Fayette County, with dry gas, Niemeyer said, because it is easier and less expensive to market.

Other gas exploration companies might work faster, but Chevron prefers to take enough time to do the work safely, he said.
He said the company holds about 70 percent of the Marcellus shale leases in Fayette County, but it plans to lease more property.

"Stay tuned. We are not here to passively hold leases," Niemeyer said.