ExxonMobil strikes oil in Gulf of Mexico

@CNNMoney June 8, 2011: 1:24 PM ET
ExxonMobil has struck oil in the Gulf of Mexico, enough to power the U.S. for 28 days.

ExxonMobil has struck oil in the Gulf of Mexico, enough to power the U.S. for 28 days.

NEW YORK (CNNMoney) -- ExxonMobil announced on Wednesday that it struck oil in the Gulf of Mexico, a discovery that could yield 700 million barrels.

The company said that its first post-moratorium deepwater exploration well struck a second new source of oil and also includes a source of natural gas.

"This is one of the largest discoveries in the Gulf of Mexico in the last decade," said Steve Greenlee, president of ExxonMobil Exploration Company, in a press release.

Dan Dicker, an oil trader for 25 years and author of "Oil's Endless Bid: Taming the Unreliable Price of Oil to Secure Our Economy," said the discovery would provide enough oil to power the U.S. for 28 days, based on the daily consumption of 25 million barrels.

"It's not insignificant at all," said Dicker. "It's not an energy solution, but it's a significant piece of our supply puzzle."

While this is good news for the U.S. oil industry, it's unlikely to have a noticeable impact on the world oil supply, according to Manouchehr Takin, senior petroleum analyst at the Center for Global Energy Studies in London.

Takin said the world uses about 72 million barrels of crude oil per day. The recent find is enough to power the world for about 10 days, he said, though it will take a couple of years to be drilled, collected, refined and sold to consumers.

OPEC deadlocked on oil production

But the greatest impact of the new discovery is that it proves, in conjunction with other recent discoveries in the Gulf of Mexico, that there are still sources of oil yet to be discovered.

"It is great news for ExxonMobil and it underscores the notion that with proper safety, oil can be found and taken offshore from the deepwater Gulf of Mexico," said Tom Kloza, chief oil analyst for the Oil Price Information Service.

This ExxonMobil (XOM, Fortune 500) discovery was announced more than a year after BP's (BP) Macondo well exploded offshore from Louisiana, killing 11 workers and fouling the coast, causing great harm to the environment, tourism, the fishing industry and other parts of the economy.

Analysts said the discovery would not have an immediate impact on the oil market, which is instead feeling the weight of an OPEC deadlock on whether to supply more oil. Prices jumped nearly 2% as a result, pushing prices above $100 per barrel. To top of page

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