Large hydrocarbon discovery in Gulf of Mexico

[Pazuzu]

Houston firm announces big find deep beneath Gulf shelf | Business | Chron.com - Houston Chronicle
http://www.mcmoran.com/pdf/2010/011110.pdf

Cliff's Notes:
McMoRan and Energy XXI have found a large hydrocarbon deposit on the shelf, quite near to land but very deep (in a region that was considered "tapped out" 10 years ago).
To quote the news release from McMoRan:
"...could make Davy Jones one of the largest discoveries on the Shelf of the Gulf of Mexico in decades."

Both companies stockholders have been reaping the rewards of this announcement.

[BRPORSCHE]

Strange, I haven't heard anyone talking about this at work. Probably because we didn't find it!

[Pazuzu]

Originally Posted by BRPORSCHE

Strange, I haven't heard anyone talking about this at work. Probably because we didn't find it!

Too bad, so sad

That's OK, even some small, independent companies that might or might not have been involved in this project won't be getting anything from it, like a bonus, or a car, or lunch

[sammyg2]

That's pretty darned deep. Not easy to drill or pump from that depth.

IIRC the deepest well ever drilled wasn't much deeper than that, around 35,000 feet or something like that?

[red-beard]

Not even lunch! Those D-nozzles!

Is this in Mexican waters, USA or "in between" ?

[Pazuzu]

Very US waters, you could hit the drill rig with a rock from land. It's off the coast near Baton Rouge.

This company has some experience with ultra-deep wells...this isn't the first and it won't be the last that they do to 30K feet. pressures are over 10K PSI and temps are right around 450-500 degrees, which is still good for hydrocarbons (nothings "burnt" at that temp). Also, despite the total well depth being almost 29K, the sands are at much shallower depths.

[BRPORSCHE]

Sammy,
I regulary get rock in the 29-31k. The deepest stuff I have seen is 34K.

Mike,
I know you have been through BR, it's not exactly on the 'coast.'

[Porsche-O-Phile]

Here's what will happen:

We'll sit around and bicker about it for the next 30 years, meanwhile the Chinese will park themselves off our waters and use horizontal drilling technology to suck it out from under us, just as they're doing today in several Gulf locations.

Does anyone honestly think one drop of that stuff is coming to our shores anytime soon?

[willtel]

Originally Posted by Porsche-O-Phile

We'll sit around and bicker about it for the next 30 years, meanwhile the Chinese will park themselves off our waters and use horizontal drilling technology to suck it out from under us, just as they're doing today in several Gulf locations.

"I drink your milkshake! I drink it up!"

[strupgolf]

********** BREAKING NEWS ********** Congress, mainly Reid and Pelosi have made a decision that no more drilling will take place anywhere near this find. Quote "We do not need, nor do we want anymore of this wasteful spending to get to something this country does not need". We will make every effort to see that nobody gets to this oil and uses it in such a way as to power our country for years to come. Case closed.

[Pazuzu]

Originally Posted by Porsche-O-Phile

Does anyone honestly think one drop of that stuff is coming to our shores anytime soon?

What's "soon" to you? No, we won't see anything from it "soon", but that has zero to do with the Chinese or the government or anyone.



I'm glad to see that someone of you are capable of stepping out of your rabid political fog long enough to say "hey, good job, a small independent company strikes it big in a location that was thought to be dead, and might help drive a new rush for near shore drilling".

[M.D. Holloway]

A 'find' is much different than an active, producing well. What has been going crazy as of late is the work going on in East Texas. Huge and I mean huge finds of nat gas and it is being tapped.

There is no shortage of fuel nor greed.

[sammyg2]

I didn't realize drilling that deep was not that big of a deal, but I'm not in that side of the business.
6 miles. Wow. That's a long way down.
Makes my back hurt just thinking about it.

[RWebb]

things have changed pretty rapidly in the last decade or so re drilling

it's only in 20 ft. water tho, so that will help keep the costs down

BTW - it's 10 miles out & 20 feet deep - that tells you something about the Gulf...

[Pazuzu]

McMoRan (MMR) continues to make announcements. Up 103% and growing in the year to date.

103% in 20 days.
180% in 6 months.

Second well is planned ASAP (as in, as fast as the rig can physically get setup).

[legion]

What is meant by "hydrocarbon" in this instance?

Natural Gas?

Petroleum?

Both?

[BRPORSCHE]

Whoops. Natural gas

[legion]

Hmmm...the spot market seems to be mostly ignoring this discovery.

[sammyg2]

Originally Posted by legion

Hmmm...the spot market seems to be mostly ignoring this discovery.

The spot market is typically minute by minute, day to day. Immediate.
Since this oil will take many years at least to show up on the market it shouldn't have any effect on the spot market at all IMO.
Now the long term futures market will eventually reflect the find, since speculators control it anyway. If they think the supply is going to go up in the future they might start bailing out or shorting, but even that might not happen for a while. They usually don't look more than 6 or 9 months ahead based on what I've seen.

[sammyg2]

Just found this:

Large Oil Discovery In Gulf Of Mexico By BP.

Pushing the limits of current drilling technology to a depth over 35,000 feet, British Petroleum or BP has made a major oil discovery. The story was reported by the Washington Post on September 2, 2009 and exploration of the field is kicking off in earnest this year.

Quote: “BP said Wednesday that it made a “giant” oil discovery in the Gulf of Mexico, and analysts said that the find deep below the sea floor raised hopes that further exploration in the region could help sustain U.S. offshore oil production.

The discovery, known as Tiber, was made 250 miles southeast of Houston and was “in the same league” as other big fields BP has discovered in the Gulf of Mexico, BP spokesman Daren Beaudo said. The company would not make any estimates on the amount of oil its latest find could yield, but the biggest platform in those other fields, Thunder Horse, is producing as much as 300,000 barrels a day.

The exploration well used to find the Tiber field was the deepest vertical well ever drilled, according to Guy Cantwell, communications director at Transocean, the offshore drilling company that owns the rig. Working conditions were challenging, he said. The rig, the Deepwater Horizon, dangled about a million pounds of well casing while floating in 4,132 feet of water, and then drilled another 30,923 feet below the sea floor. Temperatures at the sea floor were about 35 degrees, while the temperature of fluids in the well miles below was 250 degrees.

Bob MacKnight, a senior consultant with the Washington consulting firm PFC Energy, cautioned that while the big new discoveries were welcome news, they might not boost overall U.S. oil output because other Gulf of Mexico fields are expected to decline. “We really need this,” he said. “After 2012, given current developments, we will see production start to decline. Without continued discoveries . . . that decline could be steep.” Washington Post

With oil prices now flirting with $100 a barrel this type of ultra deep water exploration again may be profitable. The fact that major finds such as this recent one by BP continue to be discovered is good news for American drivers. The Gulf of Mexico continues to supply over a quarter of the domestic oil and gas used in the United States. More major projects are underway by Shell and Exxon-Mobil at the very edge of U.S. territorial waters as the black gold rush continues on into the new decade.

While not the deepest well, the Perdido Spar, operated in part by Shell Oil, is the deepest water rig thus far.