BP Plc, Europe’s second-largest oil company, reported a “giant” discovery at the Tiber Prospect in the UFS Gulf of Mexico that may contain more than 3 billion barrels, sending its shares higher.
The well is located in Keathley Canyon block 102, about 250 miles (400 kilometers) south east of Houston, the London-based company said today in a statement.
The Tiber well was drilled to a total depth of approximately 35,055 feet (10,685 meters), greater than the height of Mount Everest.
The latest discovery will help BP, already the biggest producer in the Gulf of Mexico, boost output in the region by 50 per cent to 600,000 barrels of oil equivalent a day beyond 2020.
It will also allay concerns over BP’s reluctance to invest heavily in unconventional projects, such as oil sands in Canada, to replenish reserves as maturing fields age.
“It will take a while to develop, the second half of next decade, but it’s very important,” Jonathan Rigby, an analyst at UBS AG, said in a telephone interview.
BP is developing nine projects in the Gulf of Mexico and in 2007 overtook Royal Dutch Shell Plc’s output in the region.
“It will be bigger than the 3 billion barrels” of oil equivalent discovered at the nearby Kaskida field, said Robert Wine, a London-based spokesman at BP.
“This is a whole new geological play we’ve got here." BP gained as much as 20.4 pence, or 3.9 per cent, to 539.9 pence in London after the announcement and traded 17.5 pence higher at 537 pence at 11.41 am local time.
“Tiber represents BP’s second material discovery in the emerging Lower Tertiary play in the Gulf of Mexico, following our earlier Kaskida discovery,” Andy Inglis, chief executive for exploration and production at BP, said in the statement.
BP is operator of the project with a stake of 62 per cent, while Petroleo Brasileiro SA, Brazil’s state-controlled oil company, holds 20 per cent and ConocoPhillips 18 per cent.
