Chevron Makes Major Oil Discovery In Gulf Of Mexico

Sept. 5 - KGO (KGO) -- A massive oil deposit, one of the biggest ever, has been discovered deep under the Gulf of Mexico. Chevron oil made the announcement Tuesday and once again changed the conversation about oil.

The new find is in the Gulf of Mexico, nearly 300 miles southwest of New Orleans. It was the deepest well Chevron has ever drilled. The field could contain from 3 to 15-billion barrels of oil.

Chevron's announcement comes just a day after President Bush reiterated his call for more independence from foreign oil.

President Bush: "Dependence on foreign oil simply jeopardizes our capacity to grow. "

Severin Borenstein, UC Berkeley Energy Institute: "We're never going to significantly lessen our dependence on world oil. We may slow the rate at which we increase our dependence on foreign oil, but we are part of the world oil market. We are a huge importer of world oil and we're going to continue to be as long as we use oil as a primary transportation fuel."

Experts say the new field could be producing as much as a million barrels of oil a day. The United States uses about 20 million barrels a day.

It would be a significant addition to the world supply.

Barbara Shook, Energy Intelligence: "It is significant, but it's not going to have any impact anytime soon on oil prices or gasoline prices."

Severin Borenstein, UC Berkeley Energy Institute: "Well I think no one will ever notice this at the pump. I think that over the next few years if the oil field is developed it could five years from now be producing significant quantities, and that would have a slight effect on the price, but it would happen so gradually, and the effect would be so small that no one will ever really notice it."

Chevron recorded a record profit of more than $14 billion dollars last year and another record profit the first quarter of this year -- nearly $4.5 billion dollars. Chevron pledged to spend record amounts to increase production and exploration.

The new find may make the company even richer.

Severin Borenstein, UC Berkeley Energy Institute: "Chevron is likely to make big profits if they can really pull the quantities of oil they're talking about out of these wells."

To read more on the newfound oil well, read The Back Story.

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