Clarification of the Huge Chevron Gulf Oil Discovery

[4dsc]

http://www.energybulletin.net/20140.html

1. The range of amount -- from 3 billion to 15 billion (in itself a huge range -- reserves of Exxon Mobile are around 14 billion barrels total) is comprised of no single field of more than 300 million barrels. An entire area of as much as 15 billion barrels with no "giant" over 1 Bn bar oil field is unusual. Oil discoveries tend to cluster with a giant (King) and several queens and even more jacks.

2. The area is very deep: 7000 feet of seawater and a further 20,000 feet below the ground. That is about 3 miles below the surface, in 1+ miles of deep water. The normal time to accurately estimate oil and gas field size is months. These fields are more challenging because of the extreme depths. It is therefore likely that very little is known with certainty about the potential reserves from a geological standpoint.

3. Production will not start, at the very earliest, at 2010. Full production, will not start at the very earliest 2013. Many projects are being delayed so these dates are most likely the best possible scenario.

8. The wells are estimated to cost between $80M to $120M each, starting in 2010, and a completion time of 60 days. Payback period with gas at $7 is about 3 to 5 years (by my rough calculations). Although it is likely that some new technical issues will be likely be needed to be resolved as the depth is approaching record levels. Further, insurance rates at these depths in the Gulf will likely be very high – the rough payback period here doesn’t include insurance costs.

[The_Casual_Observer]

1. Sounds like scraping the bottom of the barrel to me.

[BrklynLiberal]

2. Sounds like by the time this happens we could all be either dead or

on alternative fuel...

[bhikkhu]

3. Like other past premature "supergiant" announcements

this one seems to get smaller and smaller, the closer you look. It also seems to be synchronized with the political agenda, as were others.

[profgoose]

4. Why You Don't Know Jack-2 about the Gulf Oil Find

Yep, and here's even more debunking of "Jack-2" from The Oil Drum today:

"With the successful test drilling of Jack-2 in the ultra deepwater Gulf of Mexico, there has been a media blitz proclaiming the good news. The "peak oil" theory is under attack. This article takes a closer look at the prospectivity, geology, economics, technology, reservoirs, hydrocarbons and logistics of the Lower Tertiary play in the Gulf of Mexico."

The author pretty much tears it up. Here's a link: http://www.theoildrum.com/story/2006/9/8/11274/83638