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New Drilling Technology to Put Billions of Barrels of Oil in Reach

Analysts Say

HOUSTON, Aug 14 (Reuters) – An oil production breakthrough that producers say can safely tap ultra-high pressure fields could bring billions of barrels of oil within reach, analysts say.

The new technology promises to deliver a combined 1 billion barrels of oil from Chevron's Anchor project and similar projects by Beacon Offshore Energy and BP, analysts said.

Recent developments in ultra-high-pressure drilling technology like the one used by Chevron in the Gulf of Mexico could open up vast new reserves of oil and gas, they said.

“This is a game-changer for the oil industry,” said John Kilduff, a partner at Again Capital LLC in New York. “It's going to allow us to access oil that we couldn't get to before.”

The technology, which uses a new type of drilling bit and a special mud system, can withstand pressures of up to 20,000 pounds per square inch (psi), far higher than the 15,000 psi that conventional drilling equipment can handle.

This allows drillers to reach deeper and more challenging reservoirs, where oil and gas are trapped under extreme pressure.

“It's a significant step forward for the industry,” said David Pursell, an analyst at Tudor, Pickering, Holt & Co. “It opens up a whole new realm of possibilities.”

Analysts say the new technology could help to boost global oil production by as much as 5 million barrels per day by 2025. This would be a major boost for the global economy, which is heavily dependent on oil.