Shell says Gulf find may hold 100 million barrels

Shell's state-of-the-art Olympus platform is preparing to journey to the deep-water Gulf of Mexico. (Shell)

Shell’s state-of-the-art Olympus platform is preparing to journey to the deep-water Gulf of Mexico. (Shell)

A drilling hunch with its roots in the Jurassic period is paying off for Royal Dutch Shell, with a potential 100-million barrel oil find adding to the company’s bounty in the Gulf of Mexico.

Shell said Wednesday that its Vicksburg exploratory well encountered an estimated 500 feet of net oil pay. The well is five miles from the company’s Appomattox site, where Shell already has found 500 million barrels of potentially recoverable resources.

“This is a Jurassic-age reservoir that is more than 160 million years old that was deposited as desert dunes and now is sitting beneath the floor of the Gulf of Mexico,” said Mark Shuster, executive vice president of Shell Upstream Americas Exploration.

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He said Shell geologists were brainstorming about 15 years ago and came up with the idea of exploring to see whether they could access the Norphlet Play — a prolific onshore formation — in the deep waters of the Gulf of Mexico.

“No one thought we would be able to find oil in this reservoir in the deep water,” Shuster said. “But we made the first forays into this play, and subsequently, other companies are coming along.”

Shell bought licenses in 2002 for the area where it drilled the Vicksburg and Appomattox wells.

It made its first oil discovery at Appomattox in 2009 and now is evaluating strategies for  going forward with development.

The Vicksburg discovery nearby raises the possibility of connecting the wells to make production more economic, Shuster said.

He said that the company probably will produce from multiple wells at Appomattox, regardless of further development on Vicksburg discoveries.

“The reason that Vicksburg is important is that it is another significant discovery and it is adjacent to Appomattox,” Shuster said. “What’s most surprising is that we found a resource base that is in the range of what we had expected, but at the higher end.”

The Vicksburg well is under nearly 7,500 feet of water and was drilled to a total depth of 26,385 feet, making it one of Shell’s deepest wells in the Gulf — with the attendant challenges of high pressures and well temperatures.

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But the discoveries have more than proved that the instincts of the geologists 15 years back were right on track.

“The Norphlet Play is a strong pillar of our portfolio,” Shuster said. “We have been out there since the early 2000s, exploring for oil in these deep plays. We are quite happy — we have had the Appomattox success and now this new Vicksburg success.”

Shell is operating the Vicksburg well with a 75 percent interest. Nexen, a wholly owned subsidiary of Chinese national oil company CNOOC Ltd., owns the remaining 25 percent interest.

Transocean’s Deepwater Nautilus rig drilled the Vicksburg well.

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