Chevron Corp. (CVX) said Thursday it will invest $4 billion to develop the Big Foot oil field in the deepwater Gulf of Mexico .

The newly approved project is expected to have a production capacity of 75,000 barrels of oil and 25 million cubic feet of natural gas per day. Production is expected to start in 2014, in water depths of 5,200 feet, approximately 225 miles south of New Orleans .

The decision follows Chevron's October move to invest $7.5 billion to develop two other massive oil fields in the area, showing the oil giant still sees the Gulf of Mexico as a key driver of its long-term production growth, despite uncertainty over fallout from the BP PLC (BP, BP.LN) oil spill. The federal government is imposing stricter rules for the offshore energy industry in the aftermath of the deadly explosion and sinking of the deepwater drilling rig in April, which unleashed the worst accidental offshore spill in U.S. history.

The U.S. Gulf remains an attractive bet for U.S. oil companies as one of the only remaining spots where state-run firms don't have first crack at major new discoveries.

"We have a fundamental belief that the industry and the government will work through permitting issues and safety regulations and that the energy business will continue in the Gulf of Mexico after this process," Steve Thurston, Chevron's vice president for deepwater exploration projects, told Dow Jones in an interview. Stopping investment in the Gulf is not "acceptable" either for companies or for the government, Thurston said.

Big Foot, discovered in 2006, will be Chevron's sixth operated project in the Gulf of Mexico 's deepwater. The field is located in a region of the Gulf known as the ultradeep Miocene formation, where the energy industry has made several large finds in recent years, including the doomed Macondo field discovered by BP, which leaked millions of barrels of oil into the Gulf.

Chevron will focus next year on the manufacturing of Big Foot's facility. Drilling activity will restart only at the end of 2011, by which time Chevron expects the permitting process, currently slowed down by an onslaught of new regulation, to have returned to normal. "We certainly believe we will have all the bumps on the road around the permitting handled by that," Thurston said.

Chevron holds a 60% interest in the project, while Norway 's StatoilHydro ASA (STO) and Japan 's Marubeni Corp. (8002.TO) have stakes of 27.5% and 12.5%, respectively.

Chevron confirmed in 2009 that it held talks with China National Petroleum Corp. to sell a stake in Big Foot in order to share costs of development. The talks were not successful.

Chevron, the second-largest U.S. oil-and-gas company by market value after Exxon Mobil Corp. (XOM), has been spending heavily in the last five years to reverse a rapid decline in production. The company said Dec. 9 it will increase its capital expenditure budget by 20%, to $26 billion in 2011, with 85% going to exploration and production.

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