BP finds huge oil field deep beneath the Gulf ofMexico

By Julie Schmit, USATODAY

9/3/09

 

Britishenergy producer BP on Wednesday reported a "giant" oil discovery inthe Gulf of Mexico that's likely to spur more excitement about the region'spotential.

 

Thewell, 250 miles southeast of Houston, was discovered after BP drilled one ofthe world's deepest exploration wells. It went down 35,000 feet, a distance onpar with the cruising altitude of many domestic flights.

 

BPhasn't released specifics on the size of the field. But if it turns out to betruly "giant," it'll contain more than 500 million barrels ofrecoverable oil, according to definitions by the U.S. Energy InformationAdministration. The last giant discovered in the deepwater Gulf of Mexico wasThunder Horse in 1999. It's also operated by BP.

 

Thenew find — which will produce for the domestic U.S. market — isamong 18 oil discoveries since 2000 in ultra-deep water off the coast of Texasand Louisiana, says Leta Smith, a director of IHS Cambridge Energy ResearchAssociates.

 

Oneof those included another massive find nearby by BP in the so-called Kaskidafield in 2006. That two big fields were discovered in the same region, alongwith others, signals the potential for more in the deep water. Development ofthe new find will be closely watched by others "to see how it playsout," Smith says.

 

Thenew discoveries will also drive an increase in domestic oil production for thefirst time in decades, she says. BP won't say when its new finds will startproducing oil. Thunder Horse took nine years to come online.

 

Whilea big find, the field's potential production won't constitute more than a"drop in the bucket" when it comes to U.S. oil consumption, saysPerry Fischer, editor of trade journal World Oil in Houston. The U.S. consumes20 million barrels of oil a day.

 

Sharesof BP, the biggest oil and gas producer in the Gulf of Mexico and thefifth-largest publicly traded oil producer in the world, rose 4% to $52.53Wednesday.

 

Thenext step for BP is to dig more wells to ascertain the potential size of thefind, says BP spokesman Daren Beaudo. That alone is likely to take severalyears. Technical challenges to extract the oil will be huge, says analystSmith. Those include managing the depth of the well and temperatures andpressures.