DAVID BLACKMON: Energy Companies May Be On Cusp Of Uncorking Next Massive Oil, Gas Boon

Constantly advancing technology has always been the driver behind the advance of the oil-and-gas industry since the first successful U.S. well was drilled by Edwin Drake near Titusville, Pennsylvania, in 1859. The Drake well was drilled to a then unheard-of depth of 69 feet using the most primitive equipment imaginable.

This week, 165 years later, U.S. oil giant Chevron announced it had achieved first production in its Anchor field in the Gulf of Mexico. At its shallow depth, underground pressure in the Drake well would have been negligible, just enough to force the oil up out of the ground. The Anchor semi-submersible floating production unit (FPU) that was started up by Chevron this week enables the capture of massive volumes of oil and natural gas from underground formations up to 34,000 feet below sea level at pressures up to 20,000 pounds per square inch.

“The Anchor project represents a breakthrough for the energy industry,” said Nigel Hearne, executive vice president, Chevron Oil, Products & Gas. “Application of this industry-first deepwater technology allows us to unlock previously difficult-to-access resources and will enable similar deepwater high-pressure developments for the industry.”

Chevron says seven deepwater wells will be tied into the Anchor FPU, which has the capacity to capture, process and transport as much as 75,000 barrels of oil and 28 million cubic feet of natural gas every day. The company estimates reserves in the field of 440 million barrels of oil equivalent with current technology. But, again, the technology deployed by the industry advances every day, meaning a far bigger amount of oil and gas will ultimately be recovered over the coming years.

Other major oil companies, like BP, are also beginning to deploy similar high-pressure technology that they and analysts believe will help them tap into billions of new barrels known to exist in deep, high-pressure formations in various parts of the world. Globally, BP says it believes deployment of advanced technology could help it access up to 10 billion barrels of known high pressure reserves.