BP Plc's latest Gulf of Mexico discovery, the biggest US oil find in three years, may spur an exploration revival in a region thought by some industry executives to be played out after output slumped. London-based BP said on Wednesday it identified a “giant” prospect called Tiber more than six miles (9.7 kilometers) beneath the surface of the Gulf. The find confirms there are more large crude reservoirs yet to be found off the coasts of Louisiana and Texas, said Matt Snyder, lead Gulf of Mexico analyst at consulting firm Wood Mackenzie Ltd. in Houston. “This is definitely good news for the Gulf,” Snyder said in a telephone interview on Wednesday. “When a supermajor like BP uses a term like ‘giant' to describe a discovery, people sit up and take notice.” The announcement brings new attention to a region where offshore exploration was pioneered more than six decades ago when the former Kerr-McGee Corp. drilled the world's first commercial oil well out of sight of land. It struck crude in October 1947, Daniel Yergin, chairman of IHS Cambridge Energy Research Associates Inc., wrote in “The Prize,” his book on the industry's history. The region has lost favor among some producers. Exxon Mobil Corp., the biggest US oil company, hasn't emphasized Gulf of Mexico exploration because most discoveries haven't been large enough to justify the expense, Chief Executive Officer Rex Tillerson told reporters in March 2008. The Irving, Texas-based company paid $8.6 million for rights to explore 17 blocks in last month's federal auction of Gulf leases. Tillerson is focusing his $20 billion drilling budget on places such as Brazil and Qatar that he believes will yield bigger returns. BP, whose partners at Tiber are Petroleo Brasileiro SA and ConocoPhillips, said its discovery may hold 3 billion barrels of crude and natural gas. Of that total, the companies may be able to extract the equivalent of 450 million barrels of oil, said Leta Smith, a director at IHS Cambridge in Houston. At current prices, that amount of oil would be worth more than $30 billion. Tiber is BP's second discovery in three years in a geological formation in the Gulf known as the lower Tertiary, which consists of a layer of rocks created 24 million to 65 million years ago. It's the 18th discovery to date in the lower Tertiary, which is deeper than any existing producing fields. BP Chief Executive Officer Tony Hayward is spending $115 million a week in the US to find new prospects and boost output. Before Tiber begins pumping oil, Hayward's scientists must figure out how to coax crude from delicate seams of stone where temperatures can exceed 250 degrees Fahrenheit (121 Celsius), said Smith, a former Amoco Corp. geologist. Tiber was drilled 250 miles southeast of Houston in 4,132 feet (1,259 meters) of water, reaching almost 31,000 feet beneath the seafloor. The total length of the drill stem from the floor of the rig to the terminus of the well was more than a mile longer than Mount Everest is high. BP, which operates Tiber, plans more wells to assess the expanse and characteristics of the field, according to a company statement. BP said it doesn't yet know if Tiber will prove commercially viable. If future tests confirm the field holds the equivalent of 450 million barrels of recoverable oil and gas, Tiber will be the largest US find since at least August 2006.
