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BP in ‘giant’ new oil strike
The oil major has made a potentially huge oil discovery in its fields in the Gulf of Mexico
Oil giant BP announced yesterday that its new Tiber well, drilled down to a depth of 9,400 metres in the Gulf of Mexico, has yielded positive results which could lead to an oil find at least equal to the Forties field, the biggest in the North Sea with 4bn barrels in total. Investors immediately scrambled to buy shares in the company, pushing them up over four per cent to 541.5p, their highest level of the year. BP has a 62pc stake in the Tiber block, with Petrobras, the state Brazilian oil company, owning 20 per cent and US oil company ConocoPhillips 18 per cent.
The find is located in the middle of the Gulf, an inaccessible location 250 miles away from land and meant drilling down a distance equivalent to Mount Everest into the sea-bed. The company emphasised that more work was needed to establish the exact size of the find but early signs suggested the strike had yielded a lighter, higher-quality oil. Fortunately for BP it lies near its existing Kaskida field with 3bn barrels, which will allow it to be mined more commercially.
Andy Inglis, BP's chief executive of exploration and production, said of the find "These material discoveries, together with our industry-leading acreage position, support the continuing growth of our deep water Gulf of Mexico business into the second half of the next decade. "As production siphons reserves off, you have to keep finding new ones. BP pinned a lot of hopes on the Gulf of Mexico and they look like they are coming good."
It is thought that the finds at Kaskida and Tiber could see production increase in the Gulf of Mexico by half over the coming 10 to 15 years.
WHAT THEY ARE SAYING:Malcolm Graham-Wood, director of oil specialist HansonWesthouse, in the Independent: "It will take time and be expensive but, if BP gets it right, Tiber could be producing a million barrels a day in the longer term."
Ed Crooks in the FT: "Although BP has been riding high recently, there were fears that its strong performance could not continue into the next decade. The Tiber discovery has helped allay those fears." ·
