BP Makes Large Oil Well Discovery In Gulf of Mexico

Last week BP, proved the Gulf of Mexico was still an untapped oil resource when they announced their finding of a large, as-of-yet undiscovered oil well in the Gulf. It is predicted that the new find may house up to 3 billion barrels of oil in total. 

BP has named the new discovery the Tiber Prospect, and experts have labeled it the largest, deepest well ever drilled in the history of oil drilling. Official measurements for the size and depth of the well have not yet been determined, but officials are estimating it is bigger than the 2006 oil well Kaskida, which is estimated to be able to yield 3 billion barrels of oil.  Estimates for the size and depth have been calculated at around 35,055 feet with a depth of 6 and half miles. 

BP currently holds the title of largest producer of oil for the Gulf of Mexico region. The UK-headquartered company harvests around 400,000 barrels per day in the area, however once the company is able to harvest oil from Tiber Prospect as well as Kaskida, it is expected to be producing up to 605,000 barrels per day. 

Analysts currently following the discovery say that BP cannot hope to begin pumping the new oil well until at least 2014, although the London-based company has yet to announce a start date for oil pumping at the Tiber site. Although BP’s last large oil discovery aside from Tiber and Kaskisa was Thunder Horse which was discovered in 1999. Thunder Horse did not begin producing barrels of oil until last year, so it could be longer than 2014 before either new site is up and running.

So far that Gulf of Mexico has proved to be a rewarding hunting ground for oil companies wishing to explore new waters. The costs can be significant, however, with the actual project set-ups costing hundreds of millions of dollars. Thunder Horse took $1 billion to build initially and then cost an extra $250 million more to repair after hit hard by the area’s frequent hurricane visits. However, many analysts have said that, despite hurricane risks, the Gulf of Mexico is ultimately cheaper than more politically unstable countries such as Africa, Venezuela, and Iraq where many oil companies had previously been drilling.