Gulf oil discovery may be bigger than Alaska's Prudhoe Bay!

Geoscientists may have made the biggest oil discovery in 38 years off the coasts of Louisiana and Texas.
It could be the biggest domestic oil find in 38 years, but production is years away, and even then it won't reverse America's growing reliance on imports or have any meaningful effect at the gasoline pump.

A group led by "Chevron" has tapped a petroleum pool 270 miles south of New Orleans -- and almost 4 miles beneath the ocean floor -- in a region that could hold as much as 15 billion barrels of oil, or more than Alaska's Prudhoe Bay.

The proximity of the Gulf of Mexico to the world's largest oil-consuming nation makes the discovery extra attractive to the industry. However, analysts said the find could bring pressure on Florida and other states to relax limits they have placed on drilling in their offshore waters for environmental and tourism reasons.

Chevron estimated that the 300-square-mile region known as the lower tertiary, a rock formation that is 24 million to 65 million years old, contains between 3 billion and 15 billion barrels. The upper end of that range would be enough oil to expand the country's reserves by 50 percent. But the first drop of oil from the lower tertiary isn't expected to hit the market until at least 2010, and at best it will only slow the decline in annual U.S. production.

Challenges...
While the industry was mostly upbeat about the potential of this new discovery, it also acknowledged some challenges, including a dearth of rigs capable of drilling in such deep water and the long lead times required to drill and complete deep-water wells.

The U.S. consumes roughly 5.7 billion barrels of crude-oil in a year, while its reserves currently exceed 29 billion barrels, according to the U.S. Energy Department. To put that into perspective, Saudi Arabia's reserves are believed to exceed 250 billion barrels.

The well was drilled in the Walker Ridge area of the Gulf, 175 miles off the coast of Louisiana. It is an area the industry has been exploring for about five years.

San Ramon, California-based Chevron said the well set a variety of records, including the deepest well successfully tested in the Gulf of Mexico. Chevron said the well was drilled more than 20,000 feet under the sea floor.