Jack could boost US fuel reserves by 50 per cent

06 September 2006

San Ramon, USA: Chevron Corp. and two partners, Devon Energy Corp. of Oklahoma and Norway's Statoil said Tuesday they had tapped a huge source of new oil in the Gulf of Mexico's deep waters, a find which could potentially boost U.S. petroleum reserves by more than 50 per cent. The announcement has now fuelled speculation that further discoveries in the Gulf could help ease United States' oil supply worries.

Chevron Corp. said that it had successfully completed a record setting production test on the Jack #2 well at Walker Ridge Block 758 in the Gulf of Mexico. Drilled at a record breaking 28,175 feet, Chevron's well is among the deepest ever drilled -- more than five miles -- and is a record depth for the Gulf of Mexico.

The geologic formation being targeted by Chevron's group and others could begin producing oil steadily as early as 2012, and it could yield 800,000 barrels per day of crude, or about 11 percent of total U.S. production, according to analysts. San Ramon-based Chevron would not quantify the size of its find, except to note that Jack could hold between 3 billion barrels and 15 billion barrels of oil at the high end.

While Chevron has a 50% working interest in the well, Devon Energy and Statoil each own a 25% working interest.

Although the discovery holds out the promise that the Gulf region could hold more oil than previously expected, experts warn that the crude will be expensive to extract and take years to bring production online. Analysts note that there have been several highly-touted oil finds over the years that have ultimately fizzled out falling far short of expectations.

The Chevron well, dubbed Jack, is 270 miles southwest of New Orleans and is one of a string of oil discoveries that began in 2002. There have been more than a dozen discoveries in the region with names such as Great White, Tiger, Silvertip, St. Malo, and Cascade. Last week, oil giant BP added its Kaskida project to the list.