A trio of oil companies led by Chevron Corp has tapped a petroleum pool deep beneath the Gulf of Mexico that could boost the US reserves by more than 50 percent. A test well indicates it could be the biggest new domestic oil discovery since Alaska's Prudhoe Bay a generation ago.
But the vast oil deposit roughly 6.4km beneath the ocean floor will not significantly reduce the country's dependence on foreign oil and it won't help lower prices at the pump anytime soon.
"It's a nice positive, but the US still has a big difference between its consumption and indigenous production," said Art Smith, chief executive of energy consultant John S. Herold. "We'll still be importing more than 50 percent of our oil needs."
Chevron on Tuesday estimated the 777km2 region where its test well sits could hold between 3 billion and 15 billion barrels of oil and natural gas liquids. The US consumes roughly 5.7 billion barrels of crude oil in a year.
It will take many years and tens of billions of dollars to bring the newly tapped oil to market, but the discovery carries particular importance for the industry at a time when Western oil and gas companies are finding fewer opportunities in politically unstable parts of the world, including the Middle East, Africa and Russia.
The proximity of the Gulf of Mexico to the world's largest oil consuming nation makes it especially attractive. And it could bring pressure on Florida and other states to relax limits they have placed on drilling in their offshore waters for environmental and tourism reasons.
The country's reserves currently are more than 29 billion barrels of oil equivalent, according to the US Energy Department. But the US imports most of its oil from abroad and its overall supply is tiny when compared with, say, Saudi Arabia, whose reserves exceed 250 billion barrels.
Chevron's well, called "Jack 2," was drilled about 8.5km below sea level.
The well was drilled in the Walker Ridge area of the Gulf, about 434.5km southwest of New Orleans and 282km off the coast of Louisiana. It followed up a discovery made by Chevron in 2004.
San Ramon, California-based Chevron said the well set a variety of records, including the deepest well successfully tested in the Gulf of Mexico. Chevron said the well was drilled more than 6,096m under the sea floor below 2,134m of water for a total depth of 8,599m.
Chevron has a 50 percent stake in the field, while partners Statoil ASA of Norway and Devon Energy Corp of Oklahoma City own 25 percent each.
During the test, the Jack 2 well sustained a flow rate of more than 6,000 barrels of oil per day, but analysts and executives believe the payoff could be much larger than that.
The successful test well does not mean a huge supply of cheap oil will hit the market anytime soon.
Oppenheimer & Co analyst Fadel Gheit estimated that the first production for the Chevron-led partnership might not come on line until after 2010, depending on how many more test wells the companies drill.
That said, many companies stand to benefit from their own projects in the so-called lower tertiary, a rock formation that is 24 million to 65 million years old.
DETERRENCE: With 1,000 indigenous Hsiung Feng II and III missiles and 400 Harpoon missiles, the nation would boast the highest anti-ship missile density in the world With Taiwan wrapping up mass production of Hsiung Feng II and III missiles by December and an influx of Harpoon missiles from the US, Taiwan would have the highest density of anti-ship missiles in the world, a source said yesterday. Taiwan is to wrap up mass production of the indigenous anti-ship missiles by the end of year, as the Chungshan Institute of Science and Technology has been meeting production targets ahead of schedule, a defense official with knowledge of the matter said. Combined with the 400 Harpoon anti-ship missiles Taiwan expects to receive from the US by 2028, the nation would have
North Korea yesterday fired about 10 ballistic missiles to the sea toward Japan, the South Korean Joint Chiefs of Staff (JCS) said, days after Pyongyang warned of “terrible consequences” over ongoing South Korea-US military drills. Pyongyang recently dashed hopes of a diplomatic thaw with Seoul, Washington’s security ally, describing its latest peace efforts as a “clumsy, deceptive farce.” Seoul’s military detected “around 10 ballistic missiles launched from the Sunan area in North Korea toward the East Sea [Sea of Japan] at around 1:20pm,” JCS said in a statement, referring to South Korea’s name for the body of water. The missiles
‘UNWAVERING FRIENDSHIP’: A representative of a Japanese group that co-organized a memorial, said he hopes Japanese never forget Taiwan’s kindness President William Lai (賴清德) yesterday marked the 15th anniversary of the Tohoku earthquake and tsunami, urging continued cooperation between Taiwan and Japan on disaster prevention and humanitarian assistance. Lai wrote on social media that Taiwan and Japan have always helped each other in the aftermath of major disasters. The magnitude 9 earthquake struck northeastern Japan on March 11, 2011, triggering a massive tsunami that claimed more than 19,000 lives, according to data from Japanese authorities. Following the disaster, Taiwan donated more than US$240 million in aid, making it one of the largest contributors of financial assistance to Japan. In addition to cash donations and
North Korea tested nuclear-capable rocket launchers, state media reported yesterday, a day after Seoul detected the launch of about 10 ballistic missiles. The test comes after South Korean and US forces launched their springtime military drills, due to run until Thursday. North Korean leader Kim Jong-un on Saturday oversaw the testing of the multiple rocket launcher system (MRLS), the Korean Central News Agency (KCNA) said. The test involved 12 600mm-caliber ultra-precision multiple rocket launchers and two artillery companies, it said. Kim said the drill gave Pyongyang’s enemies, within the 420km striking range, a sense of “uneasiness” and “a deep understanding
RSS