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MarketWatch: Chevron-led group may find top U.S. oil source

Completes test to 28,175 feet in a well 270 miles offshore New Orleans

By MarketWatch
Last Update: 4:53 AM ET Sep 5, 2006

LONDON (MarketWatch) — Chevron Corp. said a production team it leads made the deepest successful well test in the Gulf of Mexico, potentially unearthing a reservoir of oil that could make it the top domestic source.

Chevron said Tuesday that it successfully drilled at the Jack #2 well at Walker Ridge Block 758 to a total depth of 28,175 feet, with more than 20,000 feet of that below the sea floor.
 
The well, 270 miles southwest of New Orleans, sustained a flow rate of more than 6,000 barrels of crude oil per day, the company said.

Chevron and its co-owners plan to drill an additional appraisal well in 2007.

Chevron owns half of the well, while Devon Energy and Statoil each own 25%.

According to a report in The Wall Street Journal, the timing of which coincided with Chevron’s announcement, the companies estimate that the recent discoveries in the Gulf of Mexico’s lower-tertiary formations — which include more than the Jack #2 well — hold between 3 billion and as much as 15 billion barrels worth of oil and gas reserves.
 
At 15 billion barrels, it would boost the nation’s current reserves of 29.3 billion barrels by 50%, the report said.

If the Gulf of Mexico is as fertile as that estimate, companies that could benefit include Anadarko Petroleum , Petroleo Brasiliero,  Exxon Mobil and Royal Dutch Shell.

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