Huge Oil Find In Gulf

Discussion in 'Current Events' started by red states rule, Sep 7, 2006.

  1. red states rule
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    red states rule Senior Member

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    The libs and greens have been bellowing how the world is running out of oil, and how we need to start driving golf carts with bucket seats to conserve oil.

    Well, this blows their talking points out of the water

    Lets start the drilling and start building new refineries to process the oil.



    http://www.chron.com/disp/story.mpl/front/4163472.html

    Test suggests huge Gulf of Mexico oil discovery
    By BRAD FOSS
    Associated Press

    WASHINGTON — U.S. oil and gas reserves could grow by more than 50 percent as three companies said today that results from a deep-water exploratory drilling project in the Gulf of Mexico indicate a significant oil discovery.

    Chevron Corp. estimated the 300-square-mile region where its test well sits could hold between 3 billion and 15 billion barrels of oil and natural gas liquids. Analysts are calling it the most significant domestic discovery since Alaska's Prudhoe Bay more than a generation ago.

    It will take many years and tens of billions of dollars to bring the oil to market, but the discovery carries particular importance for the entire 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 U.S. Energy Department. But the U.S. imports more than half of its oil from countries with much larger reserves, such as Saudi Arabia whose reserves are nearly 10 times those of the United States.

    Chevron's well, called "Jack 2," was drilled about 5.3 miles below sea level. 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 financial implications of the prospect are most significant for independent oil and gas producer Devon, which is the smallest of the three partners. Devon's shares soared more than 10 percent on the New York Stock Exchange.

    "This could not have happened in a better place," Devon CEO Larry Nichols said in a conference call with analysts.

    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, including BP PLC, Exxon Mobil Corp. and Anadarko Petroleum Corp., 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.

    "They may be the first ones to hit the jackpot, but if the current thinking is correct, this is only a beginning," Gheit said.

    The well was drilled in the Walker Ridge area of the Gulf, about 270 miles southwest of New Orleans and 175 miles off the coast. It followed up a discovery made by Chevron in 2004.

    San Ramon, Calif.-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 20,000 feet under the sea floor below 7,000 feet of water for a total depth of 28,175 feet.

    Shares of Devon rose $6.24, or 9.7 percent, to $70.39 in midday trading on the New York Stock Exchange, above the top end of the stock's 52-week range of $48.94 to $70.35. Shares of Chevron rose $2.04, or 3.2 percent, to $66.87.
     
  2. Bullypulpit
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    Bullypulpit Senior Member

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    We still can't drill our way out of our dependence on foreign oil. Nice try though.

    If you look at the reserves Venezuela is sitting on, though, viable now that oil is well above the level which would make production profitable, the center of OPEC power could shift from the Middle East to Venezuela.
     
  3. red states rule
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    red states rule Senior Member

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    Up to 15 billion barrels in this ONE find. Given all the other reserves we have within our own boarders, we can drill our way out of foreign dependence.

    Crank up the drills, build the refineries, and watch the price of oil drop and our economy grow.
     
  4. JeffWartman
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    JeffWartman Senior Member

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    This could be a very lucky find to hold us over until we develop alternative energy, though.

    Alternative energy will come. We just need time.
     
  5. JeffWartman
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    JeffWartman Senior Member

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    There still isn't enough within our own borders. Let's use this find to reduce our dependence on foreign oil temporarily while we develop alternative fuels.

    Seems reasonable, no?
     
  6. Mr.Conley
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    Mr.Conley Senior Member

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    Okay, that's a supply of somewhere between 3 months and 2 years assuming no rise in demand. However, it's going to take a few years to build all the rigs needed to extract the oil at any significant rate so we're probably not going to see a major price drop soon. Since US domestic oil production has declined since the 70s and is 99% likely to continue to do so it's far better to look at this as more a replenishment of our oil stocks and less of an expansion. Plus, while this is a "big" US find, compared to a lot of foriegn oil sites it isn't very much. Certainly not the next Saudi Arabia. Otherwise good news though. Just don't start celebrating the end of our oil problems.
     
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  7. Gunny
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    Gunny Gold Member

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    And along comes the Dem to piss on the campfire.
     
  8. Mr.Conley
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    Mr.Conley Senior Member

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    Sorry to ruin the parade, but this isn't the end to our problems. Maybe if this field was 5 to 10 times bigger than the biggest estimate it could replace our oil dependency, but this one ain't gonna cut it.
     
  9. Gunny
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    Gunny Gold Member

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    Who has suggested it as an end to our oil problems? I see it merely as a band-aid. It just buys us some time.

    The only TRUE relief we will ever have from oil dependency is an alternative fuel source.

    However, it IS good news and doesn't need to be pissed on.
     
  10. JeffWartman
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    JeffWartman Senior Member

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    Which is the EXACT point of my above posts :mm:
     

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