Chevron taps vast oil pool in Gulf

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A trio of oil companies led by Chevron Corp. has tapped a petroleum pool deep beneath the Gulf of Mexico that has the potential to boost the nation's reserves by more than 50 percent. A test well indicates it could be the biggest domestic oil discovery since Alaska's Prudhoe Bay more than a generation ago.

But the vast oil deposit about four miles beneath the ocean floor won't significantly reduce the country's dependence on foreign oil and won't help lower prices at the pump anytime soon.

"It's a nice positive, but the U.S. still has a big difference between its consumption and indigenous production," said Art Smith, chief executive officer of energy consultant John S. Herold Inc. "We'll still be importing more than 50 percent of our oil needs."

Chevron yesterday estimated that the 300-square-mile region where its test well sits could hold 3 billion to 15 billion barrels of oil and natural gas liquids. The U.S. consumes about 5.7 billion barrels of crude oil in a year.

It will take many years and tens of billions of dollars to bring the newly tapped Gulf oil to market, but the discovery carries particular importance for the industry at a time when Western oil and gas companies are finding fewer opportunities in politically unstable parts of the world, including the Middle East, Africa and Russia.

The proximity of the Gulf of Mexico to the world's largest oil-consuming nation makes it especially attractive. And it could bring pressure on Florida and other states to relax limits they have placed on drilling in their offshore waters for environmental and tourism reasons.

The country's reserves currently are equivalent to more than 29 billion barrels of oil, according to the Energy Department. The oil fields at Prudhoe Bay, discovered in 1968, are the largest in North America. Since 1977, more than 12.8 billion barrels of oil have been pumped from there.

But the U.S. imports most of its oil, and its overall supply is tiny compared with that of Saudi Arabia, the world's largest oil-producing nation, whose reserves exceed 250 billion barrels.

Chevron's well, called "Jack 2," was drilled about 5.3 miles below sea level.

The well was drilled in the Walker Ridge area of the Gulf, about 270 miles southwest of New Orleans and 175 miles off the coast of Louisiana. It was a follow-up to a discovery made by Chevron in 2004.