Will Deep Water Drilling Prevent The End Of Oil?

"Chevron, Devon Energy (Oklahoma City) and Statoil ASA, the Norwegian oil giant, reported that they had found 3 billion to 15 billion barrels in several fields 175 miles offshore, 30,000 feet below the gulf's surface, among formations of rock and salt hundreds of feet thick.

While it is too early to know exactly how big the fields are, the oil companies expressed hope that they had the potential of being even larger than those at Prudhoe Bay, off the northern coast of Alaska."

"This is frontier stuff," said Daniel Yergin, president of Cambridge Energy Research Associate, noting that the discovery is at levels deeper than deep-sea fields in the North Sea and off North Africa. "Success at these depths in the Gulf of Mexico would facilitate ultra-deepwater exploration elsewhere in the world because it will have proven the technology and capabilities."

"It will take more than a year of drilling to confirm the value of the find, and the depth of the water will make extraction extremely expensive â€" profitable only if oil prices remain at least $40 a barrel, according to oil industry analysts.

According to Chevron, the successful test was the culmination of about two years of drilling by the three companies, using seismic and drilling equipment at record depths and pressure."

"The deep waters of the Gulf of Mexico may represent the last area in the United States where large oil and gas reserves remain to be discovered, although some experts see the potential for big discoveries deep off the Atlantic and Pacific coasts, which would require Congressional action to exploit."

"This is a breakthrough that confirms very large reserves of recoverable oil in the gulf," Mr. Yergin of Cambridge Energy Research Associates said. "This announcement also reflects how the oil industry is marching offshore into deeper and deeper waters around the world."