SHELL: MORE OIL

Royal Dutch Shell says it has discovered 100 million barrels of oil equivalent in the Norphlet, a formation in the Gulf of Mexico – its third big find in the area.

The Rydberg discovery underscores the status of the Gulf of Mexico as one of the world's most prodigious oil provinces. The basin, hit by a six-month moratorium on deepwater drilling imposed in the aftermath of the 2010 Deepwater Horizon disaster, has staged a big comeback in recent years, with many companies stepping up their exploration efforts there. The Gulf of Mexico accounts for almost half of Shell's US oil and gas production.

Europe's largest oil company said the Rydberg well was drilled to a depth of 8,000 metres, including about 2,300m of water. It said the well encountered more than 120m of net oil pay – indicating a relatively large reservoir of economically producible oil.

The Norphlet play, made up of ancient Jurassic-era rocks, extends from the onshore US to the deep waters of the Eastern Gulf of Mexico. Shell acquired its first lease in the region in 2001, and since then has made three big discoveries there: Appomattox in 2010, Vicksburg A in 2013 and Rydberg this year. The three add up to more than 700m barrels of oil equivalent.

Marvin Odum, head of Shell Upstream Americas, said Rydberg's proximity to the other two finds in the Norphlet made it "particularly exciting". "These successes represent the emergence of another hub for Shell's deepwater activities," he said.

Shell is the operator of the field, with a 57.2 per cent stake. Ecopetrol of Colombia has 28.5 per cent and Nexen, which was acquired by Cnooc of China last year, has 14.3 per cent.

ft.com