Gulf Spill Reservoir Still Worth $3.5 Billion, Will Likely be Tapped Again


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Relief Wells May be Later Used for Drilling
While we were all quietly celebrating the news that the Macondo well that spewed nearly 5 million barrels of oil into the Gulf was finally officially "dead", there were nagging concerns that nevertheless refused to be silenced. For example, will US policy towards offshore drilling change in any meaningful way? Will the practice be safer? Or, more symbolically, what's going to happen to the reserve of oil that just sealed up? The New York Times reports that the BP-owned reservoir may hit the auction block, and be the site of yet another commercial well -- and if so, oil companies may turn to the very relief wells used to help halt the flow to siphon the remaining oil.The New York Times reports:

While BP plans to permanently abandon its stricken well in the Gulf of Mexico, with little but a plug left at the top, it may yet make use of the reservoir of oil and gas that the well tapped into. Experts say that there are no technical or commercial reasons why BP -- or another company if BP is wary of the political or public-relations repercussions -- could not eventually produce oil from the formation, which BP once estimated contained about 50 million barrels of oil. The well spewed only about one-tenth of that amount, according to government estimates.

"The bottom line here is that this reservoir still remains a target for further production," said Tadeusz W. Patzek, chairman of the department of petroleum and geosystems engineering at the University of Texas.

That well, one oil expert estimates, is still worth around $3.5 billion dollars. The official estimate of oil lost over the course of the spill is 4.9 million barrels. With over 45 million barrels left, there's obviously plenty of room left for profit. But, as pointed out by the Times, I can't imagine BP sees reopening the same reservoir for drilling anytime soon as a feasible public relations maneuver.

But, selling the rights to the well, or the title to the area altogether, would give another company the opportunity to operate the well under less scrutiny. And if they do, they may very well use the relief well drilled to help stymie the flow. Here's the Times again:

The relief wells, however, which were being drilled at a cost of about $100 million each, would be an obvious choice for any future project. The first intercepted the stricken well just above the reservoir, about 13,000 feet below the seabed. The second, meant as a backup, was halted about 10,000 feet down. Either well could be redirected and used to tap into the reservoir.

"Since these wells are almost to the formation, it would be prudent to continue down to the formation and make these wells producers," Dr. Langlinais said.

Of course, there's nothing particularly extraordinary about this news beyond the symbolic ramifications -- the source which produced an unprecedented environmental disaster remains open for business in much the same manner as it did before. Or, to read a bit further into things: that oil is still a valuable commodity, and will be profited upon. The BP spill changed little in terms of how we need, view, or use oil. Five years from now, you might be filling up your car with oil pulled from the same reservoir as that of the biggest oil spill in American history. Funny thought, right?

More on the BP Gulf Spill
Official Gulf Spill Estimate Doubled: There's Been an Exxon Valdez Every Week
BP Gulf Spill May Cause Loss of 1 Million Jobs
BP Could Go Bankrupt Over Gulf Spill

Tags: Gulf Oil Spill | Oil | Oil Spill | United States

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