Don Briggs – Louisiana Oil & Gas Association -

With Gulf of Mexico drilling activity at a record low, the announcement by London-based BP (British Petroleum) last week of its massive discovery in the deepwater Gulf of Mexico was welcome news in the industry.

In its news release, BP called the Tiber Prospect a “giant oil discovery” with potential production of 300,000 to 400,000 barrels of oil a day and reserves of 4 billion to 6 billion barrels of oil equivalent, which includes natural gas.

To put that in perspective, the current U.S. daily crude oil production is 5 million barrels per day. Being less optimistic, the Tiber Prospect potentially could provide 5 percent of the U.S. daily oil production. That, of course, is presuming U.S. production will be at 5 million barrels per day by 2020.

That’s right, the timeline to develop the Tiber Prospect and bring on line the first barrel of oil easily could take 10 years to develop. Most of us, when reading about a discovery such as the Tiber Prospect or BP’s Thunder Horse, which was discovered in 1999 and started producing 250,000 barrels a day last year, believe the oil will just start flowing after being discovered.

The Tiber Prospect is being touted as the deepest well ever drilled by the oil and gas industry, at an overall depth of 35,000 feet, nearly seven miles, which includes a water depth of 4,132 feet. The Thunder Horse water depth is 6,000 feet. The well is about 250 miles southeast of Houston in the Western Gulf of Mexico planning area.

Just a few decades ago, drilling on the Gulf of Mexico Shelf in 300 feet of water was a monumental accomplishment that used the latest technologies. The technology required to drill in 4,000 feet of water to a total depth of 35,000 feet is much like landing on the moon.

The bottom hole temperatures are hot.

“It could be upwards of 250 degrees Fahrenheit,” said Leta Smith, a director with Cambridge Energy Research Associates. “The pressures can be the most challenging aspect of it.”

The Gulf of Mexico is the most expensive place in the entire world to drill for oil and natural gas, with a finding cost of nearly $70 per barrel.

According to the Energy Information Administration, the Gulf has nearly 45 billion barrels of technically recoverable oil, a figure that is most likely low. The Tiber Prospect further confirms the Gulf of Mexico has the potential for lucrative geological formations that can attract more exploration.

BP and its partners in the Tiber Prospect, Petroleo Brasileiro and ConocoPhillips, said they could potentially extract the equivalent of 450 million barrels of oil, worth more than U.S. $30 billion.

For Louisianans, the discovery of Tiber is important and provides jobs and economic development.

Ted Falgout, director of the Greater Lafourche Port Commission, said, “Some of the support for this development will come out of Fourchon. Although it is in the Western Gulf, it will be good for the industry, which is largely supported out of Louisiana.”

This is just one more example of why we have to continue to press Congress and MMS to open the Eastern Gulf of Mexico for exploration. These projects may be off the coast of Florida, but it will be Louisianans who support and service the offshore platforms.