London - BP’s Gila prospect in the Gulf of Mexico had produced a “significant” discovery, Europe’s second-biggest oil company said yesterday, capping its most successful year for exploration since 2004.
Gila, co-owned with ConocoPhillips, was found in the Paleogene trend, the same layer of rock as the Kaskida discovery in 2006 and Tiber in 2009. The well was drilled under 1 500m of water about 480km south-west of New Orleans. More drilling would be needed to determine the size of the Gila find, BP said.
Chief executive Bob Dudley pledged to focus more on exploration to help return BP to growth following the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. Gila is the seventh discovery from 15 exploration wells completed this year and follows potentially commercial finds in India, Egypt, Angola and Brazil.
“Exploration is at the heart of BP’s upstream strategy,” Lamar McKay, the head of its exploration and production arm, said in a statement. “The successes and opportunities now being delivered through our increased exploration activity confirm our confidence in our ability to sustain BP’s resource base.”
The company gained as much as 1 percent in early trade in London. It is up 3.1 percent since its third-quarter earnings beat analyst estimates on October 29 and it unexpectedly raised the dividend.
BP said yesterday that it would have to write off $230 million (R2.4 billion) of costs from the unsuccessful Pitanga well in Brazil. It would also write off $850m of the value of the licence the well was drilled in, acquired from Devon Energy in 2010.
Petroleo Brasileiro said on Tuesday that it had discovered oil in the Pitu prospect in Brazil, 40 percent of which belongs to BP. In Angola, BP partner Cobalt International Energy said earlier this month that it had successfully tested crude flow rates at the Lontra prospect, which is below layers of salt and mirrors the geology off Brazil.
The Gila well was drilled to 9 000m. BP has stepped up drilling in the Gulf of Mexico this year after a moratorium on new wells following the Deepwater Horizon spill slowed down activity for years. The company has more rigs operating in the region than in its whole history.
Tiber, the discovery close to Gila in 2009, has at least 1 billion barrels of recoverable resources and was the biggest find in the region in a decade.
Dudley sold off more than $60bn of assets following the 2010 accident and said the company would focus on its most profitable fields. In October, he promised a further $10bn of sales by the end of 2015.
BP still faces billions of dollars in fines following a court case over the spill. Two parts of a three-phase trial in New Orleans over blame for the spill and the size of the penalty have been completed. – Bloomberg