SHELL, BP DRILL MAJOR GULF OF MEXICO OIL STRIKE
Shell Oil Co. has drilled what may be a major oil discovery in the ultradeepwater Gulf of Mexico frontier.
Shell and partner BP Exploration cut a net 440 ft of pay in an undisclosed number of oil bearing sands at 14,500-18,100 ft on Mississippi Canyon Block 763. The discovery well is in 3,100 ft of water on Shell's Mars prospect about 130 miles southeast of New Orleans.
SIZE POTENTIAL
BP Chairman Robert Horton said the Mars prospect is potentially the largest in which the company has participated since discovery of its major North Sea fields.
More wells might be needed to reasonably estimate Mars reserves, which Shell Pres. Frank H. Richardson said could surpass Shell's 1989 Auger discovery in 2,860 ft of water on Garden Banks Block 426 in the Gulf of Mexico. Shell estimates ultimate recovery of Auger reserves at more than 220 million bbl of oil equivalent. When Auger's tension leg platform is installed in 1993, it is expected to set a record for deepwater production.
More engineering studies will be needed to assess potential for commercial development. Shell and BP are considering Mars development options including tension leg platforms, floating and subsea production systems, and compliant towers. Production could begin within 5 years of a decision to proceed with development, the companies said.
Shell has drilled four wells on Mars prospect, and a fifth is under way, Shell acquired Mars acreage on Mississippi Canyon Blocks 763 and 807 for lease bonuses totaling $2.4 million. BP can earn as much as a 33.333% interest in the two blocks under terms of a joint venture agreement with Shell.
DEEPWATER STRATEGIES
The deepwater Gulf of Mexico is a prime target in BP's strategy to shift its exploratory focus to areas being opened by new drilling and development technologies.
BP plans several deepwater wells in the gulf in 1991.
In the past 3 years, BP has become a major leaseholder in the gulf's deep water with interests in 325 blocks, about half of which it operates.
Shell owns 35% of all leased gulf acreage in water deeper than 1,500 ft.
Copyright 1991 Oil & Gas Journal. All Rights Reserved.