Deep pockets in Gulf of Mexico

Flush with profits, companies spend billions to hunt for crude and drill more wells

Oil companies flush with the largest profits in their corporate lives — $36.1 billion for Exxon Mobil last year, $14.1 billion for Chevron — are spending billions to hunt for crude oil and drill more wells in the gulf, even as they struggle to repair what the hurricanes smashed.

In the search for oil, they are pushing to the edge of what is possible, exploring ever farther from shore and drilling deeper than before. Technological improvements let the oil companies bore wells 30,000 feet down. And with crude oil prices doubling in the last three years, projects that didn’t make financial sense in the past now do.

..The companies know they are building multibillion-dollar projects in a sea prone to violent hurricanes. They are willing to take that risk. Despite the storms, the gulf is a far friendlier environment than many of the places where they work.

No armed insurgents roam the waters, kidnapping oil workers as they do in Nigeria. No populist president wants to hike the companies’ taxes, as happened in Venezuela. OPEC doesn’t control the gulf.

San Francisco Chronicle