BP makes "giant" oil find in Gulf of Mexico

[Americanhero1]

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.
http://finance.yahoo.com/news/BP-makes-giant-oil-find-in-rb-168427118.html?x=0&.v=6

[Lewinsky Stinks, Dr. Brennan Rocks]

This will mean even more of our government sucking coyote tuchis. But it's better than Muslim Nazi oil.

[RanterMaximus]

All we need now are political leaders who are willing to drill for oil here in America.  Fat chance on that.

[Lewinsky Stinks, Dr. Brennan Rocks]

That won't do the trick. Either we need to create an energy source that obsoletes oil or take over the petrosheik nations and take their oil.

[cjd]

That won't do the trick. Either we need to create an energy source that obsoletes oil or take over the petrosheik nations and take their oil.

Oil will very likely be king for the next 50 years.... I say find ways to buy oil at a fair price but be ready to move away from it to more productive power sources at the first opportunity. Freezing to death with a stagnated economy is not an option when it comes to moving away from oil. Domestic drilling is a very viable option. 12 miles off the coast of Mexico is international waters. Why would Mexico have any claim on oil reserves there? America should take advantage of every drop of domestic production.

[The One and Only Mo]

Alberta has a lot of oil.