BP Discovers ‘Giant’ Oil Field in Gulf of Mexico
HOUSTON -- The British oil giant, BP, announced today the discovery of what it characterized as a “giant” oil field more than six miles under the Gulf of Mexico, but it may take years to assess how much crude can actually be recovered.
“This is big,” said Chris Ruppel, a senior energy analyst at Execution, a London-based investment bank. “It says we’re seeing that improved technology is unlocking resources that were before either undiscovered or too costly to exploit because of economics.”
12 Comments:
This reinforces the point that there is no such thing as peak oil, just peak oil at a given price. Both the Shale Gas and the deepwater oil come about because of higher returns. Oil has been about to run out since the 1870's when some execs of Standard Oil wanted to diversify because oil could only be found in NW Pennsylvania.
However this does not say that conservation does not make sense the higher the price the more it does make sense if you can clear away the problem of landlord tennant issues where one makes the investment and the other reaps the reward.
I wonder if the folks that constantly complain about the cost of gasoline are willing to put up this kind of money?
While actual oil development from BP's Tiber well will be years away, the block will likely provide a huge payoff for the oil major.
BP paid only $406,060 for Block 103 in the Keathley Canyon about 250 miles southeast of Houston as the single bidder in the 2003 Western Gulf of Mexico auction held by the U.S. Minerals Management Service, according to a government spokeswoman.
The cost for the site lease wouldn't even cover one day's worth of drilling, which costs $458,000 to $517,000 for each 24 hour period...
Currently, reading The Prize by Daniel Yergin. A very well researched book that tracks the history of oil. A very entertaining read.
QT,
I like your cartoonization.
Bob,
Thanks. Cartoons are something I enjoy although the website does not have a Manga option. Perhaps...that's a good thing!
Always a pleasure, sir.
Off Santa Barbara, California the oil is so shallow there is natural seepage. There has been an estimated 2 million barrels that have seeped naturally since the ban on new wells 39 years ago.
Here's a website advocating oil drilling there to reduce seepage:
soscalifornia.org
You might be happy to learn the Obama Administration has approved $2 billion dollars in loans to support offshore drilling. Unfortunately, this offshore drilling is in Brazil and will be performed by the state-owned (majority share) Brazilian oil company, Petrobras.
Peak oil deniers again? Good grief. BEST case scenario for Tiber is that it'll be producing oil in 2020. Peak oil has to do with production, not reserves. Also, I hope people are taking note that most of the major finds of the last 10 years (virtually none are producing, btw) are ridiculously high cost oil. So even if supply is able to meet demand the price of oil is going to stay high and keep rising.
The peak oil deniers take the easy road and dont do any analysis beyond a company press release.
I think everyone agrees that oil production will peak at some point and then begin a decline as price incentives lead to viable fuel alternatives. This heppens in the standard life-cycle of any product.
The problem with the term "peak oil" is the "sky is falling" hysterics that often come with it. Predictions of economic collapse and oil wars are far too prevelant on peak oil sites for the term to be taken seriously in any conversation.
What if a group of oil based sorverign wealth funds bought out BP after a curious decline in oil prices?
Wouldn't it be easier to just drill in Alaska?
While the private sector is out discovering oil 7 miles deep a government-sponsored alternative energy initiative is having trouble drilling down 800 feet:
http://www.nytimes.com/2009/09/03/business/energy-environment/03alta.html?_r=2&ref=todayspaper
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