BP makes "giant" oil find in Gulf of Mexico

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By Tom Bergin



LONDON (Reuters) - Oil major BP Plc said it has made an oil discovery in the Gulf of Mexico, which analysts believe could contain over 1 billion barrels of recoverable reserves, reaffirming the Gulf's strategic importance to the industry.



BP said in a statement on Wednesday that it had made the "giant" find at its Tiber Prospect in the Keathley Canyon block 102, by drilling one of the deepest wells ever sunk by the industry.



Further appraisal will be required to ascertain the size of volumes of oil present, but a spokesman said the find should be bigger than its Kaskida discovery which has over 3 billion barrels of oil in place.



Estimates of recoverable reserves range from around 20 percent of oil in place.



"Assuming reserves in place of 4 billion barrels and a 35 percent recovery rate, BP's proven reserves .. would rise by 868 million barrels -- equivalent to 4.8 percent of the group's 18.14 billion barrels of proven reserves," Aymeric De-Villaret, oil analyst at Societe Generale said in a research note.



BP, the biggest oil producer in the U.S. and biggest leaseholder in the Gulf of Mexico, has a 62 percent working interest in the block, while Brazilian state-controlled Petrobras



owns 20 percent and U.S. oil major ConocoPhillips owns 18 percent.



Iain Armstrong, analyst at Brewin Dolphin, said the discovery may have implications for long-term oil prices.



"It will ease concerns about peak oil because it shows there is life left in these mature areas," he said, adding that it could be the second half of the next decade before the find is producing.



The discovery also bodes well for other exploration in that part of the Gulf of Mexico, including at Royal Dutch Shell's nearby Great White field, Jason Kenny, oil analyst at ING in Edinburgh, said.



BP shares, which had been trading slightly down ahead of the statement, closed up 4.3 percent at 541 pence, outperforming a 1.75 percent rise in the DJ Stoxx European oil and gas sector index.



The Gulf of Mexico has become increasingly important to Western oil majors as oil rich-countries such as Saudi Arabia, Venezuela and Russia reserve their richest fields to be developed by their state-owned oil companies.



The Gulf is especially attractive because it offers high profit margins, due to relatively low taxation compared to countries such as Russia and Nigeria, and because of the low political risk.



As nearer-shore discoveries dry up, companies have pushed further out to sea, which has forced them to develop new technologies to detect and extract the oil.



The prospects for massive discoveries in the deep water of the Gulf of Mexico is also good news for U.S. politicians' ambitions to reduce the country's reliance on imported oil, although oil executives doubt the U.S. is capable of becoming self sufficient in oil.



(Reporting by Tom Bergin; Editing by Jon Loades-Carter and Rupert Winchester)

Copyright 2009 Reuters Limited.

 
And yet we'll still get raped at the pump because there hasn't been a new refinery built in this country in decades. Doesn't matter if oil fell from the sky if there's no way to process it it does no good. There will always be an excuse to raise prices. Ya think the folks with the fat wallets are going to allow gas to go down to $1 ever again? Not a chance. Funny how if a 55 gal barrel of oil goes up 25 cents on the market the consumers see a nickel per freaking gallon increase. Have you seen what oil companies make in a quarter, much less a year? Ridiculous. And who owns all the patents on the "alternative fuel" designs of the last 20 years? Oil companies. Those kids inventing engines that run off various non-revenue-generating items get offered a few million for their ideas. They decline saying they want to better the planet or make a difference. OK, say the oil companies, we'll give you $500 million. Yeah, what would you do? Cha-Ching. Off goes another way to get out from under the thumb of oil but now they own the patent and have unlimited funds protect it and develop more to keep under lock and key.



Flame on. I was in a rant mood.



 
Live in Houston and work in the O&G biz. Believe me, there is PLENTY oil and natural gas out there for the next 100 years or more even if consumption rises. It costs more to get when you have to do deep water drilling, but its there. People hate Exxon, I love them, one of our best customers along with BP and Shell. Now the energy speculators on Wall Street.......they all need to be hanged.
 
Steve,

Simply stated.....Nicely put could not have said it better, lets create a patent, sell it for 500 mil, and open and alternative fuel company. How do you think they would like that
 
Wouldn't it be nice if they actually used it to help at least CONTROL the prices to a tolerable and consistent price...
 
Coastie, who is "they"?



The government controlling a price to the benefit to the people? This will never, and has never happen. Isn't it the government not allowing refineries, drilling rigs, and power plants to be built, which is the most glaring cause for the usable energy crisis?



A 2 dollar flat tax per gallon of gasoline?!! When we collapse and Canada or someone takes us over, I hope their government is more merciful and intelligent. Private transit keeps America alive. Try riding Amtrak extensively if you think public "green" transit can work. Been there, done that, and never again.



. Off goes another way to get out from under the thumb of oil but now they own the patent and have unlimited funds protect it and develop more to keep under lock and key.



Do you seriously believe this? Do you also believe that 9/11 was done by the US Government, and that the Moon Landing was a hoax?



Patents only last a few years, once that time expires, every and anyone could take the design for their own. Your conspiracy holds no water; if these surefire alternate energy plans worked, then some idealist/entrepreneur would take the patents and put them into play. There are a fair number of ivory tower left-leaning rich "hippies" who would conceivably fund such an effort.



If governments can't keep space travel to themselves, a costly and treacherous domain where they aren't exactly giving the private citizen knowledge, then how could Big Oil conceivable horde alternative energy patents which are public domain?



 
Steve said:
Ya think the folks with the fat wallets are going to allow gas to go down to $1 ever again? Not a chance.

I think the bigger problem is the greenies who don't want us to get any more of our own energy.
 
The greenies who have idols who fly around in jets flagrantly, have some of the most energy-wasting lavish houses (cough Al Gore cough), and waste as much as they can, because it's great to conserve, as long as it doesn't hurt their lifestyle.



Greenies-- :(



You're definitely right on that.



If "evil" Big Oil has so much money and influence, how come it can't overrule the Ivory Tower green advocates' influence on government? It can't be because they don't want to, because eventually they will have to, and more product sold at a cheaper profitable price can garner more $ than selling less product at a heinous price. Economics and Logic seem to stand against these evil conspiracies. If anyone has one, it's the tree-huggers ;)



But why don't we just disprove the conspiracy right now by having some more refineries and power plants built immediately, and see if that doesn't alleviate the "energy crisis". I for one am tired of [i}France[/i] being ahead of us on Nuclear Power. :(
 
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