Peak Oil News: Chevron's Deepest Well Holds Less Oil Than Forecast

Wednesday, March 22, 2006

Chevron's Deepest Well Holds Less Oil Than Forecast

Bloomberg

Chevron Corp.'s Knotty Head discovery, the deepest well ever drilled in the Gulf of Mexico, holds about half as much oil and natural gas as originally estimated, said Nexen Inc., a partner in the project.

The discovery, announced in December, probably holds the equivalent of 200 million to 500 million barrels of oil, less than an earlier estimate of 350 million to 1 billion, said Kevin Finn, a spokesman for Calgary-based Nexen. The estimate was lowered after a second well was drilled off the main shaft.

Additional drilling to gauge the extent of the field has been delayed because no rigs are available in the Gulf, Finn said. Chevron, Nexen, Anadarko Petroleum Corp. and BHP Billiton Ltd. each own a 25 percent stake in the project. Chevron was operator of both wells.

“The 1-billion-barrel estimate was a pre-drill estimate based on everything going exactly right,” Finn said today in a telephone interview. “That rarely occurs in an oil well. But this is still one heck of a big find.”

Shares of Chevron rose 21 cents to $56.78 at 1:43 p.m. in New York Stock Exchange composite trading. Woodlands, Texas- based Anadarko rose $2.01 to $98.36, and Nexen climbed C$1.20 to C$63.05 ($54.11) in Toronto. Earlier today in Australia, Melbourne-based BHP Billiton fell 14 cents to A$25.18 ($18.10).

Chevron, Exxon Mobil Corp. and other oil producers are drilling twice as deep as they ever have before to locate untapped reserves big enough to make up for shallower wells that are nearing depletion.

Knotty Head was drilled in 3,500 feet (1,067 meters) of water to a depth of 30,589 feet under the sea floor, San Ramon, California-based Chevron said in December. The field is about 170 miles southeast of New Orleans.


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