What's Happening in the Mexican Gulf

abarrelfullabarrelfull wrote on 22 Mar 2010 12:34
Tags: gulf mexico nexen pemex shell statoil

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The Gulf of Mexico is considered a mature area when it comes to oil production. It has been in decline, and was almost being written off. Pemex, Mexico's State owned oil company, has long relied on a massive but shrivelling property, Cantarell Oil Field. Yet in the space of a few weeks, we have seen a number of important announcements that, in the words of Tom Sawyer, News of Its Death have been exaggerated.

The biggest was this.

Mexican President Vicente Fox has announced the discovery of a new deep-water oil field, which is believed to contain 10bn barrels of crude. The field is in the Gulf of Mexico, and Mexico says it could be bigger than its largest oil field, Cantarell.

Of course politicians are not held to the same level of accountability as publicly traded companies, but none the less, it does at least sound interesting.

Meanwhile, one of the afforementioned companies, has an announcement of its own.

Shell announces 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.

Shell's partner in the investment, Nexen, is bullish on the news

"The Appomattox discovery confirms our confidence in the play and provides a strong basis to evaluate the remainder of our significant acreage position in the Eastern Gulf of Mexico," commented Marvin Romanow, Nexen's President and CEO.

So however much it is, they expect more.

Shell's competitor for Europe's largest oil company, had a discovery of their own last year.

Meanwhile, the US government raised $950 Million by selling off more leases in the Gulf.

Central Gulf of Mexico Oil and Gas Lease Sale 213, held today in New Orleans, attracted $949,265,959 in high bids.

Among the top bidders are Statoil, bidding highest on 21 leases, W&T Offshore gave the best bid on 5 leases, and Noble Energy, Inc. was the apparent high bidder on 16 leases

So mature or not, there is a lot of interest in developing more of the Gulf of Mexico's potential deep water reserves. It just goes to show that there is life in the old dog yet.


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