Nigeria, Brazil, Others Set to Benefit as New Drilling Technology Gives Access to over 5bn Barrels of Oil

•Brent oil holds above $80

Emmanuel Addeh in Abuja

An oil production breakthrough that producers say can safely tap ultra-high pressure fields could put up to 5 billion barrels of previously inaccessible crude into production, analysts have said.

Earlier, Chevron disclosed it had pumped first oil from a field at 20,000 pounds per square inch pressures, a third greater than any prior well.

Its $5.7 billion Anchor project employs specially designed equipment from NOV Dril-Quip and drillships from Transocean, Reuters reported.

The Number 2 US oil firm began pumping from the first Anchor well on Sunday, with the second already drilled and close to being ready to turn on, said Bruce Niemeyer, head of Americas oil exploration and production.

A 2010 blowout at Gulf of Mexico’s Macondo prospect killed 11 workers, fouled fisheries and covered area beaches in oil.

Transocean was the operator of the ill-fated Deepwater Horizon vessel and BP was the owner of the Macondo project. Both are involved in the new, higher pressure well developments.

Today, the industry is employing new drillships and equipment that has been created to cope with the extreme pressures that are a third greater than encountered in the Macondo failure.

“The industry has done their bit to safely deliver the barrels, with the new technology,” said Mfon Usoro, a principal analyst who focuses on Gulf of Mexico operations at research firm Wood Mackenzie.

The new gear promises Chevron’s Anchor and similar projects by Beacon Offshore Energy and BP will deliver a combined 300,000 barrels of new oil, and put 2 billion barrels of previously unavailable US oil within producers’ reach, she said.

“These ultra-high pressure fields are going to be a big driver for production growth in the Gulf of Mexico,” Usoro added

“Similar high-pressure, high-temperature oil fields that would benefit from the 20k technology are found off the coasts of Brazil, Angola and Nigeria,” said Aditya Ravi, a Rystad Energy analyst. The Gulf of Mexico will be the proving ground for the new gear, it added.

Including non-US fields, more than 5 billion barrels of known oil and gas of known resources globally could benefit from the technology, Ravi said. Those volumes equate to about 50 days of current global production, Reuters added.

Meanwhile, oil prices were broadly steady yesterday, as concerns that conflict may spread in the Middle East and threaten production in one of the world’s major regions for crude production eased slightly.

Brent crude futures slipped 10 cents, or 0.1 per cent, to $80.59 a barrel in the morning, while US West Texas Intermediate crude futures were down 19 cents, or 0.2 per cent, to $78.16 per barrel.

After hitting a seven-month low of $76.30 at the beginning of last week, Brent rose more than 3 per cent on Monday to cap a five-day run of gains, closing at $82.30 a barrel.

“The recent rally in crude came to a halt yesterday with prices falling back as fears of a retaliatory attack on Israel by Iran receded, with the risk premium slashed,” said Ashley Kelty, an analyst at Panmure Liberum.

Iran had vowed a severe response to the killing of the leader of Hamas late last month. Three senior Iranian officials have said that only a ceasefire deal in Gaza would hold Iran back from direct retaliation against Israel for the assassination.

Israel has neither confirmed nor denied its involvement but it is fighting in Gaza against Hamas after the group attacked Israel in October. To counter Iran, the United States Navy has deployed warships and a submarine to the Middle East.