Chevron Corp., San Ramon, Calif., (NYSE: CVX) says it has begun oil production from its Tahiti Field, the deepest producing field in the Gulf of Mexico.

Chevron says daily production is expected to ramp up to approximately 125,000 barrels of crude oil and 70 million cubic feet of natural gas before the end of the year.

Chevron says the first phase of the project totals $2.7 billion and represents one of 40 projects in which Chevrons share of the investment is more than $1 billion.

George Kirkland, Chevron executive vice president, global upstream and gas, says, Tahiti is a significant addition to our growing reserves and production. It is another demonstration of our deepwater expertise, and our ability to execute an industry leading queue of major capital projects.

Discovered in 2002, the Tahiti Field is estimated to contain total recoverable resources of 400- to 500 million barrels of oil equivalent. The field is located at Green Canyon blocks 596, 597, 640 and 641, approximately 190 miles south of New Orleans and in approximately 4,100 feet of water.

The deepest producing well is more than 26,700 feet, a record for the Gulf of Mexico. Chevron says production is from two subsea drill centers tied backed to a floating production facility supported by a truss spar.

Chevron has a 58% working interest in the field and is operator. StatoilHydro has a 25% working interest, and Total owns the remaining 17% working interest.