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Huge potential seen in Gulf of Mexico oil well
Deepwater well could be nation’s largest source

Jim Jelter, Dow Jones MarketWatch
SAN FRANCISCO (MarketWatch) — A group led by Chevron Corp. on Tuesday raised expectations that it has tapped into what could be one of the nation’s biggest oil discoveries in decades, releasing results from the long-awaited test of a Gulf of Mexico deepwater oil well.

Chevron said the well, known as the No. 2 Jack Prospect well, was successfully drilled on Walker Ridge Block 758 to a depth of 28,175 feet, or more than five miles below sea level. The well is located about 175 miles off the Louisiana coast in 7,000 feet of water.
While Chevron only tested about 40% of the well’s hydrocarbon pay zones, it has yielded an impressive 6,000 barrels of oil a day, implying it has favorable reservoir geology and good pressure features. Chevron is operator on the well, with a 50% stake, while Oklahoma City-based Devon Energy Corp.

It’s the second well that the partners have drilled on the oilfield. San Ramon, Calif.-based Chevron announced in September 2004 that its first exploration well there drilled through 350 net feet of oil-bearing sandstone in what geologists call the Lower Tertiary zone.
This second well confirms the results of the first, but it leaves questions about the overall size the reservoir that can only by answered by additional drilling. Chevron said the next appraisal well will be drilled on the block next year. ..

The companies estimate that the recent discoveries in the Gulf of Mexico’s Lower Tertiary formations — which include more than the No. 2 Jack well — hold 3 billion to 15 billion barrels worth of oil and gas reserves, rivaling discoveries made on Alaska’s North Slope back in the 1960s.

But bringing that oil to a market could take several years. If the Jack Prospect is determined to be commercially viable, development will likely cost billions of dollars and test the limits of deepwater production technology. ..
(5 Sept 2006)
If the field, discovered in 2004, really is 15 billion barrels in size, that would make it the biggest discovery in decades and enough to supply current global demand for six months. Shame it is more than six kilometers under the increasingly hurricane-prone Gulf of Mexico and requires tens of billions in new and novel infrastructure – estimates of six to nine years minimum time to market have been suggested, all going perfectly.
Thus, some of the coverage is pure entertainment: Chevron’s drilling in the Gulf of Mexico could deflate oil prices including Daniel “its a break through discovery” Yergin. See Washington Post or the China Peoples Daily, or go straight to the The Oil Drum or threads. -LJ

BG makes biggest North Sea gas find in five years

Angela Jameson, Times Online
BG GROUP announced yesterday that it had made what is likely to be the biggest North Sea gas discovery for five years.

In a move that will lengthen the likely availability of domestic energy sources, the natural gas explorer and producer called the the discovery “substantial” and said that it could be developed quickly because it is close to existing infrastructure.

BG Group said that the discovery, the biggest since the Buzzard oil field was found in July 2001, could have recoverable reserves of between 100 and 275 million barrels of oil equivalent. Buzzard, which comes on-stream later this year, has reserves of 500 million barrels.
(2 Sept 2006)