OTC: Deeper and deeper they go

The Gulf of Mexico’s shelf is becoming a grandaddy in terms of oil production, pumping about 1 million barrels a day for the last 30 years or so with declines showing up.
But deepwater continues to beckon companies that are up to the challenge of drilling thousands of feet below the seabed. Current deepwater production brings in another 1 million barrels a day, says Steve Thurston, vice president of deepwater exploration and projects for Chevron. The deeper they go, the more they stand to find.
“The deepwater’s young and its still got a lot of life left in it,” Thurston said in a luncheon speech at the Offshore Technology Conference today.
He specifically addressed the Lower Tertiary trend, an ultradeep layer in the Gulf where Chevron and oilfield services giant Schlumberger completed a record-setting successful well test in its Jack field in 2006. That test showed the trend could have 3 billion to 15 billion barrels of oil, which could be the biggest North American find since oil was tapped on Alaska’s North Slope in the 1960s.
Thurston says that so far, 14 discoveries have been made from 24 wildcat wells by several companies in the Lower Tertiary — or a 58 percent rate of success.
The trend presents plenty of hurdles from top to bottom: Hurricanes, currents, unstable mud, a massive salt layer and astronomical pressures and temperatures that seriously test the mettle of any drilling operation.
“Other than that, it’s pretty easy,” Thurston says.
Chevron is drilling more wells in Jack and nearby St. Malo, and plans to drill in three other fields to further assess the trend’s potential.
However, illustrating the risks involved, Devon today announced it has abandoned its Chuck well, declaring it a dry hole.