Oil companies going deep in Gulf of Mexico drilling

The Chevron Corp. crew is developing a deepwater oil field 190 miles (305 kilometers) off the Louisiana coast projected to produce 100,000 barrels a day by 2008 and 500 million barrels overall. Each well will reach more than 26,000 feet (7,800 meters) below sea level.

It’s the kind of deepwater discovery once thought to be out of reach, but with improved technology and climbing global oil prices, companies are spending billions developing oil fields the Interior Department says will substantially boost Gulf production.
Two factors are driving companies such as these to deeper waters: aging fields on shore and in shallow waters are less productive; federal lawmakers restrict access to other prime fields such as those in Alaska, the western Gulf of Mexico and coastal waters.

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Companies are also going global with deepwater production tapping the coastal shores of Nigeria, Angola and Brazil. Deepwater accounts for about 3.7 million barrels a day _ or slightly less than 5 percent _ of global production, according to estimates by energy consultant Wood Mackenzie.

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”There are huge decisions ahead of us,” said Paul Siegele, Chevron’s vice president of deepwater production. ”It’s the challenge of exploring around the world as well as places likethe Arctic and the middle of nowhere.” Deepwater drilling in the Gulf dates to 1979 when Shell Oil Co. began production, but development really didn’t take off until the 1990s as technological advancements made it more feasible, according to Interior Department’s Minerals Management Service.

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