Chevron, Total Announce New Gulf Of Mexico Discovery

Chevron and Paris-based Total said Wednesday they've made a major oil discovery in the Gulf of Mexico southeast of New Orleans.

The so-called Ballymore prospect is about 75 miles from the Louisiana coast in the Mississippi Canyon area of the Gulf. Total is already calling it the company's largest Gulf discovery.

Chevron, which owns a controlling 60 percent stake in the partnership, said oil was struck at nearly 30,000 feet in a well that's already showing strong production characteristics. Chevron and Total said they're assessing the discovery to determine how to proceed.

The Gulf of Mexico is just beginning to show signs of returning to life for the energy sector after a prolonged downturn from the oil bust that began in late 2014.

"The Gulf of Mexico deepwater is an integral part of our company's long-term strategy," said Jeff Shellebarger, president of Chevron's North American exploration and production. "This discovery is an important addition to our portfolio, especially with its combination of size, quality and proximity to existing infrastructure."

Total is working to diversify and expand in the Gulf. Total's 40 percent stake in this prospect was just acquired in September as part of an exploration agreement with Chevron that included seven prospects covering 16 blocks in the Eastern Gulf's Norphlet play and the Central Gulf's Wilcox region. The Ballymore prospect is part of the Norphlet.

"While already deemed commercially viable, we will work together on the appraisal of this discovery and a cost-effective scheme to ensure a rapid, low breakeven development," said Arnaud Breuillac, Total's president of exploration and production.

The Ballymore discovery is about three miles from Chevron's Blind Faith platform, so there's the potential to connect it to existing infrastructure.

The Ballymore well was drilled by Pacific Drilling's Sharav deepwater drillship.

Source: Houston Chronicle