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Shell Announces “Significant” new Discovery in Deepwater Gulf of Mexico

Shell announced a “significant” new oil discovery in the deepwater eastern Gulf of Mexico, adding to discoveries in the area from 2009. The discovery is located at the Appomattox prospect in 2,200 metres (7,217 feet) of water in Mississippi Canyon blocks 391 and 392.

Appomattox
Shell sites in the Gulf of Mexico. The Appomattox prospect is the eastern-most. Click to enlarge.

Shell drilled the discovery well, located on Mississippi Canyon block 392, to a depth of 7,643 meters (25,077 feet) and encountered approximately 162 meters (530-feet) of oil pay. Shell then drilled an appraisal sidetrack to 7,910 meters (25,950-feet) and encountered approximately 116 meters (380-feet) of oil pay. Additional appraisal activities are planned for later in the year.

Shell operates and holds an 80% working interest in the prospect, with partner Nexen holding the remaining 20%.

Shell made an initial discovery in the deepwater eastern Gulf of Mexico in 2003 with the Shiloh discovery (Shell 80%, Nexen 20%). A second discovery followed in 2007 at Vicksburg (Shell 75%, Nexen 25%), located about ten kilometers (six miles) east of Appomattox.

Comments

Treehugger

Ok they found 1billions barrels by 7000 meters of drilling, and they call it significant. Oil companies are in despair of finding oil.

ejj

Uhhh where does it say they found "1billions barrels"? It just says they have 380 feet of oil pay - but spread out over how big of an area is anyone's guess. If it's over 100 square miles (2,787,840,020.3 square feet) that equals 1,059,379,207,714 cubic feet, or 188,683,495,250 US petroleum barrels....pretty impressive for one deposit; even half that amount would be impressive for one deposit. But again, until they give an estimated area there's no way of telling how much is there - anyone know how large these offshore finds usually are?

Paul

What does it say that this find is in 2,200 meters of water and the current tallest man made structure in the world is a 1,432 m tall Extended Tension Leg Platform also in the Gulf of Mexico?

ejj

If the find was 10 miles by 10 miles (100 square miles) and contained roughly 188,683,495,250 US petroleum barrels (42 gallons per US petroleum barrel), at 21 million barrels per day US consumption, it would last 8985 days / 365 = 24.6 years if this deposit alone was to supply the US with all its oil needs.

ejj

If the original well had a 530 foot pay zone, and the "appraisal sidetrack" had a 380 foot pay zone, there could obviously be more oil than my estimate above, which could be on the conservative side...but who knows until they estimate an area size for the find.

ai_vin

It just says they have 380 feet of oil pay - but spread out over how big of an area is anyone's guess. If it's over 100 square miles (2,787,840,020.3 square feet) that equals 1,059,379,207,714 cubic feet, or 188,683,495,250 US petroleum barrels....pretty impressive for one deposit

Do we know what percentage of this production zone is oil or sand? If you make some assumptions about the shape of the production zone you can say the "oil pay" is 1,059,379,207,714 cubic feet but that doesn't mean you have 188,683,495,250 US petroleum barrels. The oil only occupies the interspaces between the sand grains, maybe (I don't know) 1% - then you have to know the percentage that can be extracted, you'll never get all of it so let's say 50%. Your 24.6 years of oil could easily be just 45 days of oil.

drivin98

@ai vin You had to spoil the party didn't you. I was having a great laugh at this "conservative" estimate of trillions of barrels.
And how dare you say you actually don't know something. Just do like everyone else does and pretend you do whilst pulling numbers out of um, the air.

^_^

ejj

I need to get my numbers verified by the professors at the climate research unit at the University of East Anglia to establish some credibility with you guys....

ai_vin

Well better that than getting your facts verified by Glenn Beck @ FauxNews. :^)

ejj

I'll take the Glenn Beck / Bill O'Reilly / Sean Hannity / Rush Limbaugh / Fox News interpretation of science over the Climate Research Unit of the University of East Anglia any day of the week. :-]

ejj

99% sand seems a little viscous doesn't it? That might be how the Canadian oil sands are but surely you can't be serious with these off-shore deposits? Oil wells are called "gushers" for a reason aren't they?

ai_vin

I'll take the Glenn Beck...
Well that answers that question.

99% sand seems a little viscous doesn't it?
Sure it does but as I said "I don't know" and the point is neither do you and the actual amount of recoverable oil from this find will more likely than not it will be less than your "conservative" estimate of 24 years.

danm

At that depth this ain't going to be cheap oil.

SJC

Wasn't Shell the company that overstated reserves years ago? The trend is clear, it will be harder and more costly to keep finding more reserves. If the world's societies want to keep pouring money into this instead of better ways, that is their choice. Some would say it is Shell's and Exxon's money, but it is all our money, one way or the other.

ejj

Remember that the oil companies are sitting on war chests from all the profits they made 2004-2008...all of them combined probably have hundreds of billions of dollars, if not over a trillion in profits sitting in banks around the world. I distinctly remember ExxonMobil alone making $30-40 billion seemingly every quarter for a while there. ExxonMobil may want to get into natural gas exploration given their near finalized aquisition XTO, but there are many other companies (including refiners) that made out like bandits during $4-5 per gallon gas. Given their warchests, I don't think they're probably too concerned with deepwater drilling costs.

SJC

At some point, other investments have greater return with less risks, this is just basic business. That point will come and then we will see more of a push for even greater tax breaks for oil companies. They will remind us that our future is at stake.

Engineer-Poet

According to a quick search, 18% porosity is around the lower limit for a producible sandstone oil reservoir. Unfortunately, the producible fraction of OOIP is around 30% (maybe somewhat more with enhanced recovery techniques), and whatever fraction of the original porosity happens to be filled with water does you no good.

If you have 25% porosity full of 100% oil and you can produce 30% of it, that's 7.5% of the reservoir volume you can bring to the surface. Incidentally, Ghawar (the largest known oil reservoir in the world) is only 16 miles wide.

ai_vin

So, about 2 years worth of oil?

Will S

I'm going to hold off guessing, as the information provided is insufficient.

Bryan

SJC-

I agree research $$$ is big to develop our next gen fuel source.. but Shell is a private company in the business of making money. It is completely up to them as to whether or not this is a prudent investment. If not, they'll go out of business and a123systems will make a mint.

Additionally, governments receive handsome royalties from oil companies. So far, they don't receive anything (including taxes) from other technologies.

SJC

The last I heard, oil companies got out of paying ANY royalties on Gulf of Mexico oil for years and got away with it. Just leaving it up to private sector inertia may not be the smart way to go.

Oil companies do what they do and have done little else for 100 years. To continue down that path will put more investment capital into lower returns, but they will keep on doing it because that is what they do.

Other countries have an industrial policy that makes sure the best outcomes for the country are obtained. $14 billion in tax breaks and continued depletion allowances may not be the way to go. They can continue spending more and getting less, but we do not have to encourage nor subsidize it.

sulleny

Pssst... Don't tell the Shell guys about the LENR conference post "Conceptual Cold Fusion..."

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