BP said in a statement on Wednesday that it had made the find at its Tiber Prospect in the deepwater Gulf of Mexico. The well was drilled in Keathley Canyon block 102.

The area will require further appraisal to determine the volumes of oil present in the area but speculation is that it could be bigger than the Kaskida discovery that has an estimated three billion barrels of oil in place.

The find highlights the potential in the Gulf of Mexico and bodes well for other exploration in the area, including at Royal Dutch Shell’s Great White field.

The Gulf of Mexico has become increasingly important to Western oil majors as oil rich-countries such as Saudi Arabia, Venezuela and Russia reserve their richest fields to be developed by their state-owned oil companies.

Source: Reuters

fuel prices down

The sharp decline in the price of crude oil since the middle of 2008 has been blamed for a huge fall in profits from both Royal Dutch Shell and rival Exxon Mobil.

Reported profits for the period April to June 2009 showed profits at Shell had fallen 70% from the same period a year earlier at £1.4bn, while Exxon’s report showed a 66% decline for the same quarter with profits at $3.95bn.

Both companies recorded lower sales than a year earlier, with Shell down 51% and Exxon by 46%.

Shell say that global demand for oil remains very weak but they are doing everything to adapt to the situation, “We are sharpening our focus on delivery and affordability” said CEO Peter Voser.

The company says that it has achieved savings of $700million in the first half of 2009 and would continue with a programme of cost cutting during the remainder of the year. Shell say they have cut senior management positions by 20% as part of the planned savings.

Earlier this week BP also reported a big cut in profits.