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.
Taiwan aims to open 18 representative offices and seven Taiwan Tourism Information Centers worldwide by next year to attract international visitors, the Tourism Administration said on Saturday. The agency has so far opened three representative offices abroad this year and would open two more before the end of the year, it said. It has also already opened information centers in Jakarta, Mumbai and Paris, and is to open one in Vancouver next month and in Manila in December, it said. Next year, it would also open offices in Amsterdam, Dubai and Sydney, it added. While the Cabinet did not mention international tourists in its
EYES AT SEA: Many marine enthusiasts have expressed interest in volunteering for coastal patrols, which would help identify stowaways and illegal fishing, the CGA said Six thousand coastal patrol volunteers are to be recruited for 159 inspection offices to enhance the nation’s response to “gray zone” conflicts, Coast Guard Administration (CGA) sources said yesterday. Volunteer teams would be established to increase the resilience of coastal defense systems in the wake of two unlawful entries attempted by Chinese over the past three months, Ocean Affairs Council Minister Kuan Bi-ling (管碧玲) said. A former Chinese navy captain drove a motorboat into the Tamsui River (淡水河) in Taipei on the eve of the Dragon Boat Festival in June, while another Chinese man sailed in a rubber boat into the Houkeng
NEXT LEVEL: The defense ministry confirmed that a video released last month featured personnel piloting new FPV drone systems being developed by the Armaments Bureau Taipei and Washington are pushing for their drone companies to work together to establish a China-free supply chain, the Financial Times reported on Friday. A delegation of high-level executives and US government officials were yesterday to arrive in Taipei to discuss with their Taiwanese counterparts collaboration on drone technology procurement and development, the report said. The executives represent 26 US manufacturers of drone and counter-drone systems, while the officials are from the US Department of Commerce and the US Department of Defense’s Defense Innovation Unit, along with Dev Shenoy, principal director for microelectronics in the Office of the Under Secretary of Defense
SECURITY: The New Zealand and Australian navies also sailed military vessels through the Strait yesterday to assert the right of freedom of navigation The Japan Maritime Self-Defense Force on Wednesday made its first-ever transit through the Taiwan Strait in response to the intrusion by a Chinese reconnaissance aircraft into Japan’s sovereign airspace last month, Yomiuri Shimbun reported yesterday. The Japanese news platform reported that the destroyer JS Sazanamisailed down through the Taiwan Strait on Wednesday, citing sources in the Japanese government with knowledge of the matter. Japanese Chief Cabinet Secretary Yoshimasa Hayashi declined to comment on the reports at a regular briefing because they concern military operations. Military vessels from New Zealand and Australia also sailed through the Strait on the same day, Wellington’s defense ministry