BP unveils 'giant' oil discovery in Gulf of Mexico

LONDON — British energy giant BP has made a "giant" oil discovery in the Gulf of Mexico after drilling one of the industry's deepest-ever wells, it said Wednesday, in a further boost for crude supplies.

"BP announced today a giant oil discovery at its Tiber Prospect (well) in the deepwater Gulf of Mexico," the company said in a statement.

"The Tiber well was drilled to a total depth of approximately 35,055 feet (10,685 metres) making it one of the deepest wells ever drilled by the oil and gas industry," it added.

BP's discovery comes as the industry this week marks 150 years since crude was first drilled and days after Scottish group Cairn Energy began pumping out oil in India as exploration in the North Sea dwindles.

The discovery is larger than BP's Kaskida discovery in the same geological area three years ago, which contains around three billion barrels of oil.

Peter Hutton, an analyst at NCB Oils, said BP's announcement would be seen as "confirmation of BP's strong focus on Gulf of Mexico" exploration.

Energy groups are increasingly drilling in the Gulf of Mexico and elsewhere as North Sea oil fields dry up.

Cairn Energy on Saturday began pumping crude from a vast oilfield in the Indian desert state of Rajasthan that is set to increase India's crude output by 20 percent.

Cairn's field, the country's largest onland field and the biggest find in over two decades, will increase India's oil output by a fifth once it hits its initial peak production target of 175,000 barrels a day in 2011.

This is in contrast to the North Sea, where expenditure on exploration was down 70 percent at the start of 2009 compared to a year earlier, according to industry body Oil & Gas UK.

In the Gulf of Mexico BP operates Tiber, owing to its 62-percent stake in the well. Its co-owners are Brazilian oil giant Petrobras, with a 20-percent interest and US group ConocoPhillips with 18 percent.

"Tiber represents BP's second material discovery in the emerging Lower Tertiary play in the Gulf of Mexico, following our earlier Kaskida discovery," said Andy Inglis, BP chief executive for Exploration and Production.

"These material discoveries together with our industry leading acreage position support the continuing growth of our deepwater Gulf of Mexico business into the second half of the next decade."

BP is the biggest producer of oil and gas in the Gulf of Mexico with net production of more than 400,000 barrels of oil equivalent per day, the company said in its statement.

This could rise to 650,000 barrels daily within the next 15 years thanks to the Kaskida and Tiber wells.