BP Finds Giant Oil Field Deep in Gulf of Mexico

BP announced on Wednesday the discovery of what it characterized as a giant oil field several miles under the Gulf of Mexico, but it may take years to assess how much crude can actually be recovered. The discovery should have no immediate effect on world oil or gasoline prices because it could take three years or more to begin extracting oil. Because the oil is so deep underwater and difficult to extract, the price of oil will need to be above $70 a barrel to make drilling profitable, energy analysts said. Nevertheless, the discovery was another indication that the deep waters of the Gulf of Mexico are probably the most promising area in United States-controlled territory to bolster domestic oil production. The rise in gulf production in recent years, in large part because of BP’s deep-water giant Thunder Horse field, has stabilized domestic production after almost two decades of yearly declines. “This is big,” said Chris Ruppel, a senior energy analyst at Execution L.L.C., a London investment bank. “It says we’re seeing that improved technology is unlocking resources that were before either undiscovered or too costly to exploit because of economics.” The discovery, called the Tiber well, is about 250 miles southeast of Houston at a depth of more than 35,000 feet — greater than the height of Mount Everest — and well below the gulf floor...NYTimes