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The $1.5 trillion oil find in the Gulf of Mexico

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Jon Fahey/AP/File

(Read caption) Oil rig workers are sending pipe into a well they are drilling from a platform in the Gulf of Mexico.

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The Lower Tertiary is considered by many to be the final frontier of oil exploration in the Gulf of Mexico, where, until recently, production was forecast to decline. The post-dinosaur era geological formation was originally thought to be devoid of oil, but recent exploration has proven otherwise.

This turnaround began in 1996, when Robert Ryan, then a geologist with Texaco, pursued a hunch about an ultra-deep water geological play. For a fuller accounting of this story, Edward Klump recently wrote a fantastic, in-depth piece for Bloomberg News on the history of this development. (Related Article: Nigeria becoming World’s 1st Failed Petrostate?)

In 1996, four companies—Texaco, Royal Dutch Shell, Amoco, and Mobil— came together to drill an experimental, ultra-deep water well in the Gulf of Mexico. Known as BAHA, the well was 7,625 feet deep, deeper than any that had been previously attempted. Unfortunately, both BAHA 1 (1996) and BAHA 2 (2001) came up dry. Normally, dry wells would deter future drilling, but the success of the BAHA projects was in proving that a massive trove of oil existed where no one thought possible in the Lower Tertiary—we just needed the technology to get to it economically.

 
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