NCPA - National Center for Policy Analysis

Drilling Deep Below The Ocean's Floor

July 6, 2000

With crude oil selling at up to $30 a barrel, oil companies are going to ocean depths previously unheard of in the search for new supplies. Their quest would have been financially impractical when crude prices were low just a few years ago.

  • Until recently, drillers wouldn't think of going deeper than about 1,500 feet -- but reserves at depths approaching a mile or more now represent the biggest single new oil resource since the Middle East came on line in the 1930s.
  • Deep drilling is now underway in areas ranging from the Gulf of Mexico to Brazil and West Africa.
  • So far, about 40 billion barrels of deep-water oil have been discovered worldwide.
  • Both Shell and Exxon Mobil Corp. say the finds could hit 100 billion barrels -- equal to 10 percent of total known deposits.

Production in the Gulf of Mexico alone could rise to as much as 1.8 million barrels a day by next year, according to the Interior Department -- double 1995 levels and roughly equal to the daily output of Kuwait.

Source: Steve Liesman, "Big Oil Starts to Tap Vast Reserves Buried Far Below the Waves," Wall Street Journal, July 3, 2000.

 

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