Wed 6 Sep 2006
‘Huge oil find’ in Gulf of Mexico
Posted by Darragh Field under Resource , Peakist , Peak Oil , New OilThree companies led by US-based Chevron say they have found an oil field under the Gulf of Mexico that could boost US reserves by more than 50%.
Drilling at a test well yielded “a flow rate of more than 6,000 barrels of crude oil per day”, Chevron said.
The discovery may rival the biggest US oil field in Prudhoe Bay, Alaska.
Experts caution that the true size of the oil field is not yet known and it will be a long time before any of the oil there enters the market.
“In the last 15 years, there’ve been so many great projects that started out and then petered out,” Matt Simmons, the head of a group of energy investment bankers, told Reuters news agency.
Recently in the Gulf of Mexico, “there’s been a lot more bitter disappointments than phenomenal surprises”, he said.
The head of an energy consulting firm, Art Smith, told the Associated Press news agency that despite the discovery, the US will still be importing more than 50% of its oil needs.
“The US still has a big difference between its consumption and indigenous production,” Mr Smith said.
Experts said the oil from the well is unlikely to be available for many years and the discovery is not going to ease spiralling global oil prices.
Three firms - US oil giant Chevron, Norway’s Statoil and US-based Devon Energy - said test results under the Gulf of Mexico “may indicate a significant discovery”.
“The full magnitude of the field’s potential is still being defined,” Statoil said.
Chevron first revealed it was prospecting for oil in the area in September 2004.
The oil field is located 435 km (270 miles) south-west of New Orleans and 282 km (175 miles) offshore.
According to John Kilduff, an analyst quoted by the AFP news agency, the new oil field could produce 400,000 barrels for 20 years - even at its lowest capacity.
7 Responses to “‘Huge oil find’ in Gulf of Mexico”
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September 6th, 2006 at 3:52 am
To put that in context, 400,000 barrels per day represents about 0.5% of global consumption. Exxonmobil say “Fuel demand for cars and trucks will drive total oil demand growth at a rate of 2.5 percent per year.”
September 6th, 2006 at 3:47 pm
Clarification of the Huge Chevron Gulf Oil Discovery
Discussion at peakoil.com where Starvid says:
“Biggest find in 20 years. Enough to sustain 6 months of global consumption. We must find two fields like this every year to keep up with depletion and then put them into production to keep up with production declines in other fields. And then we need another two fields like this next year. And the year after that. And after that. And the year after that, and this must continue for as long as we want to maintain our current oil consumption. If we want to increase consumption we must find new oil even faster … But if the field is only 3 billion barrels, that’s only 35 days of global consumption.”
September 6th, 2006 at 3:52 pm
Meanwhile in China
“[shortcomings in energy] have included the time-restricted electricity systems in over 20 cities that have still not been restored and the continuously soaring price of coal that has triggered riots.”
http://english.peopledaily.com.cn/200609/06/eng20060906_300204.html
September 7th, 2006 at 3:49 am
So in reality the large oil find can stave off the global post peak crunch by 35 days!!
September 11th, 2006 at 3:27 am
Oil find unlikely to bring back cheap gasoline
By TOM FOWLER
Copyright 2006
Even the cheer-leaders of anti-peakism over at CERA don’t see this impacting oil prices…
Tom Fowler in the Houston Chronicle says:
“While validating the big discovery may bolster the view of the oil-supply optimists, even they don’t predict a return to the days of cheap gasoline in a world where demand is growing so strongly.
That includes Peter Jackson, co-author of a recent Cambridge Energy Research Associates report that predicts worldwide oil production capacity could grow as much as 25 percent in the next decade.
He isn’t letting his belief in plentiful future oil supplies change his auto purchase plans.
“The next time I change my car, I will get one that’s double the fuel-efficiency,” he said.”
http://www.chron.com/disp/story.mpl/business/4174406.html
September 14th, 2006 at 3:35 am
It’s said that oil’s well that ends well, but these oil wells may be less than they appear
by Dave Russell
published September 13, 2006 12:15 am
Newspapers across the country heralded the Sept. 5 announcement of a major new oil discovery in the Gulf of Mexico. And well we should — a promised 50 percent increase in proven U.S. reserves is something to crow about, isn’t it? Well, maybe.
EnergyBulletin.net, a non-profit consortium focusing on “peak oil,” urges caution. Its Web site acknowledges, “On the issue of resource depletion we will unapologetically be favouring geologicalpessimism over economic theory based optimism.”
Energy Bulletin contributor Randy Kirk, a senior financial analyst with the Larkspur, California-based Private Wealth Partners, LLC, “a wealth management firm serving affluent individuals,” most likely won’t be investing his clients’ money in the venture. He cautions against optimism on several fronts.
For starters, the range of the discovery — from 3 billion to 15 billion barrels — is ridiculously huge. Kirk points out the largest single deposit (known as a “King”) of the find consists of only 300 million barrels, and “Oil discoveries tend to cluster with a giant (King) and several queens and even more jacks.”
Given their depth — three miles beneath the surface of the Gulf, in over a mile of water — the deposits are likely to be more natural gas than oil. And whatever is down there, the water is too deep for any kind of pipeline to be built. The oil will have to be tankered to port, adding to the cost.
There are other variables against this discovery having an impact on our energy woes. World records for depth were set in reaching it. It’s in Hurricane Alley, 270 miles southwest of New Orleans. If things go absolutely perfectly, at the earliest, production would begin in 2010 and reach its peak in 2013.
Perhaps the biggest reason Kirk cautions against buying another “Yanktank,” as they call big American cars in New Zealand, is that we’ve seen this before. In March of this year, Mexican President Vicente Fox stood on an oilrig in the Gulf and announced a new well, Noxal 1, would produce a possible 10 billion barrels of oil. Just a few months later, the editors of the Oil & Gas Journal reported, “Fox-hailed deepwater well a modest gas find.” The reality of the find was 43 million barrels, only about 99.57 percent fewer than Fox crowed about. The large find was announced just before Pemex, the Mexican state oil company, asked the Mexican Parliament for a bigger budget and expanded rights to drill in the Gulf.
Would Chevron and their partners exaggerate an oil find to bring pressure on Congress to please a public that wants something done about gas prices? I don’t know. I am not a geologist or a politician and I didn’t stay in a Holiday Inn Express last night, but this is a story I will be watching with interest and hope to report on again in 2013.
At that time, I hope to report enough oil has come home to power our nation of 100-mpg, CO2-free vehicles for decades, but I am skeptical.
http://www.citizen-times.com/apps/pbcs.dll/article?AID=/20060913/COLUMNISTS02/60912077/1194
October 4th, 2006 at 12:08 am
There’s a political context to this find that I hadn’t clocked earlier. From Randy kirk, mentioned above, and it applies also to the ‘huge’ Mexican find the other month:
“The US Senate is weeks away from voting on the lifting of the 25-year ban on offshore drilling off the majority of the coasts in the US. This offshore drilling bill was approved in the House of Representatives but political analysts believe the bill will face more opposition in the Senate. The oil industry stands to make high profits if Congress will open up Florida and the Offshore East coast to drilling. To date the offshore drilling bill has not been approved by both houses because of environmental interests. A large potential oil “discovery” in the Gulf would provide evidence that the passing of the offshore oil bill would be beneficial.
…the announcement is reminiscent of the Mexican “huge oil discovery” announced last year, of a possible 10 billion barrels, which was quietly revised this year to around 43 million barrels, a downward revision of 99.57%. This similar “discovery” was made in Mexico last year a few months before the Mexican parliament was to vote on Pemex (state oil co)’s budget and rights to expand drilling. This illustrates the potential political pressure to announce oil and gas discoveries.”
http://www.energybulletin.net/20140.html
And on the bill in congress…
Congress: Please do . . .
Use the next few weeks to protect the environment
September 5, 2006
“In a brief and intense session of Congress, between the summer vacation and the feverish October campaigning for the fall election, the stakes will be remarkably high. As members return to work this week, they will confront such vital issues as the preservation of our coasts from oil drilling, the future of the nation’s fisheries and the security of chemical plants. The possibilities for mischief are legion.
The context: Republicans fear losing control of the House to the Democrats, which would seismically shift the balance of power for the last two years of the Bush presidency. So it’s easy to see why Republicans, with some Democratic help, are trying to open the coasts to oil and natural-gas drilling. They want to be able to say they did something about high gasoline prices at the pump - though the reality is that any action now couldn’t produce more oil or gas for years.
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The House bill would end a 25-year bipartisan moratorium on coastal drilling, a ban that protects 85 percent of the area of the Outer Continental Shelf. The bill would allow states to block some drilling, but only if governors and legislatures reach agreement and seek that protection. It also dangles in front of the states a powerful incentive to allow exploration: a cut of royalty money from oil companies that would otherwise go only to the federal government.
The sharing of this revenue would allow members to say they’ve done something for the Gulf Coast states hit so hard by hurricanes last year. But it would also blow a major hole in the federal budget, which worries deficit hawks.
The Senate bill is much narrower, focused only on allowing drilling in the eastern Gulf of Mexico. Senate leaders of both parties have vowed not to allow the language of the broader House bill to contaminate the Senate version. And the House sponsor, Rep. Richard Pombo (R-Calif.), says he won’t budge from his more sweeping bill either.
Neither drilling bill is good. So, for coastal communities, including our own, this is one subject on which we should root enthusiastically for Congress to do nothing.”
http://www.newsday.com/news/opinion/ny-vpenv054877866sep05,0,5995940.story?coll=ny-editorials-headlines