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BP makes 'giant' oil discovery
(China Daily)
Updated: 2009-09-03 07:58
LONDON: Energy giant BP has made a "giant" oil discovery in the Gulf of Mexico after drilling one of the industry's deepest-ever wells, it said yesterday, in a further boost for crude supplies. "BP announced today a giant oil discovery at its Tiber Prospect (well) in the deepwater Gulf of Mexico," the company said in a statement. "The Tiber well was drilled to a total depth of approximately 35,055 feet (10,685 m) making it one of the deepest wells ever drilled by the oil and gas industry," it added. The well, located in Keathley Canyon block 102, is approximately 400 km southeast of Houston. BP shares, which had been trading down slightly ahead of the statement, jumped to trade up 2.85 percent at 534.5 pence at 10:19 am, outperforming a 0.88 percent rise in the DJ Stoxx European oil and gas sector index. BP's discovery comes as the industry this week marks 150 years since crude was first drilled and days after Scottish group Cairn Energy began pumping out oil in India as exploration in the North Sea dwindles. Further appraisal will be required to ascertain the volumes of oil present, BP said, but a spokesman said the find could be bigger than its Kaskida discovery which has over 3 billion barrels of oil in place. Peter Hutton, an analyst at NCB Oils, said BP's announcement would be seen as "confirmation of BP's strong focus on Gulf of Mexico" exploration. Energy groups are increasingly drilling in the Gulf of Mexico and elsewhere as North Sea oil fields dry up. Cairn Energy on Saturday began pumping crude from a vast oilfield in the Indian desert state of Rajasthan that is set to increase India's crude output by 20 percent. Cairn's field, the country's largest onland field and the biggest find in over two decades, will increase India's oil output by a fifth once it hits its initial peak production target of 175,000 barrels a day in 2011. This is in contrast to the North Sea, where expenditure on exploration was down 70 percent at the start of 2009 compared to a year earlier, according to industry body Oil & Gas UK.
In the Gulf of Mexico BP operates Tiber, owing to its 62 percent stake in the well. Its co-owners are Brazilian oil giant Petrobras, with a 20-percent interest and US group ConocoPhillips with 18 percent. "Tiber represents BP's second material discovery in the emerging Lower Tertiary play in the Gulf of Mexico, following our earlier Kaskida discovery," said Andy Inglis, BP chief executive for Exploration and Production. "These material discoveries together with our industry leading acreage position support the continuing growth of our deepwater Gulf of Mexico business into the second half of the next decade." BP is the biggest producer of oil and gas in the Gulf of Mexico with net production of more than 400,000 barrels of oil equivalent per day, the company said in its statement. This could rise to 650,000 barrels daily within the next 15 years thanks to the Kaskida and Tiber wells. "It will take a while to develop, the second half of next decade, but it's very important," Jonathan Rigby, an analyst at UBS AG, said in a telephone interview. BP is developing nine projects in the Gulf of Mexico and in 2007 overtook Royal Dutch Shell Plc's output in the region. Oil rose above $68 a barrel yesterday, after a 3 percent drop in the previous session. US crude for October delivery was up 42 cents at $68.47 a barrel by 5:52 am EDT, after touching a two-week low of $67.85 earlier yesterday and falling nearly 3 percent to settle on Tuesday at $68.05. London Brent crude rose 40 cents to $68.13 a barrel. AFP-Reuters-Bloomberg News (China Daily 09/03/2009 page17) |
