‘Elephants’ Are A Gamble, Especially When There Are Hurricanes Around

Whether oil companies are up against hurricanes, errant winches or freezing temperatures, Thunder Horse and Sakhalin Energy highlight the technical and logistical challenges of the search for oil.

Thunder Horse, which analysts say is potentially the most profitable oil-production facility in the world, is in water 1,800 metres deep. Over the past 10 years, as oil companies’ reserves have dwindled, they have been forced to drill further and further down, said Andrew Strachan, North America upstream analyst for energy consultancy Wood Mackenzie. And because of the high costs, they have tended to go for large projects – known in the trade as “elephants”.

It’s a high-risk, high-reward business. With oil prices hitting a new high of more than $61 for a barrel last week, the odds look more attractive.
The Independent