Who says were running out of oil?
source: http://www.latimes.com/business/la-fi-cal-oil24-2009sep24,0,3884900.story
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- HowardRourke
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Apparently business is boomin. Who would've thought?
latimes.com
ENERGY
Oxy oil discovery could spark new interest in California's energy potential
The biggest find in the state in 35 years, somewhere in Kern County, could herald new exploration in California and the U.S., experts say. But some worry it could lead to a false sense of security.
By Ronald D. White
3:23 PM PDT, September 23, 2009
Occidental Petroleum Corp.'s vice president for corporate development sounded like a cryptologist out of a Dan Brown novel as he told investors in 2001 that a bonanza awaited the company that could "crack the code" of California's seismically fractured underground.
Now, Stephen I. Chazen is the Westwood company's president and chief financial officer. And Occidental may have broken the code.
In July, Occidental revealed it had found 150 million to 250 million barrels of oil and natural gas in an undisclosed part of Kern County using techniques that the oil company's executives would rather not talk about. It was California's biggest find in 35 years.
Some experts say it could herald a period of new exploration in California and the U.S.
"Certainly this kind of success will send other people back to California to rethink the geology and rethink the theories of the area," said Daniel Yergin, chairman of IHS Cambridge Energy Research Associates and author of the Pulitzer Prize-winning history of the oil industry "The Prize: The Epic Quest for Oil, Money and Power."
Joe Hahn knows firsthand the significance of finding that much crude in California.
A former oil reservoir engineer for Arco, now owned by oil giant BP, Hahn said that exploration in the state has been rife with failures and false leads.
"We had considerable acreage that turned out to be good as goat pasture," said Hahn, now a professor at Pepperdine University's Graziadio School of Business and Management. "It's very rare to have a find of this size" this late in California's oil-production history.
Despite steady petroleum output declines from about 394 million barrels at the 1985 peak to about 214.5 million barrels last year, California still ranks fourth in the nation behind the combined federal offshore drilling sites and Texas and Alaska.
Bruce Bullock, executive director of the Maguire Energy Institute at Dallas' Southern Methodist University, said there has been renewed interest in many old oil regions long believed to have given up most or all of their crude.
"We're seeing quite a bit of activity," Bullock said. "A: They think they can find more oil; B: They think they can get it out of the ground."
Over the last decade, Occidental has been actively acquiring leases and drilling rights in California as most other big oil companies have been selling out. But Occidental executives weren't the only people who thought that California might have a surprising amount of oil left to exploit.
The U.S. Geological Survey travels the country to assess petroleum reserves and the potential for new discoveries. In 2003 and again in 2007, its geologists said that it was likely that an additional 4 billion barrels "may be added to reserves in existing oil fields."
As Chazen put it, "we had a small amount of production in California, historically, but we made a commitment to explore in the state. Even so, it has taken us the better part of 10 years to get where we are now."
Occidental executives have kept secret both the location of the discovery and the methods used to find the new oil and natural gas field.
"The way we found it is obviously proprietary," Chazen said. "Other people might own acreage nearby that we will want to acquire."
Chazen wasn't above dropping hints about the holdings, which were painstakingly amassed over several years.
"Most of the land was not held by individuals. Most was held by some kind of corporation or institution, some by the federal government. This wasn't a redwood forest. If you had the water for it, you might be raising cotton,
latimes.com
ENERGY
Oxy oil discovery could spark new interest in California's energy potential
The biggest find in the state in 35 years, somewhere in Kern County, could herald new exploration in California and the U.S., experts say. But some worry it could lead to a false sense of security.
By Ronald D. White
3:23 PM PDT, September 23, 2009
Occidental Petroleum Corp.'s vice president for corporate development sounded like a cryptologist out of a Dan Brown novel as he told investors in 2001 that a bonanza awaited the company that could "crack the code" of California's seismically fractured underground.
Now, Stephen I. Chazen is the Westwood company's president and chief financial officer. And Occidental may have broken the code.
In July, Occidental revealed it had found 150 million to 250 million barrels of oil and natural gas in an undisclosed part of Kern County using techniques that the oil company's executives would rather not talk about. It was California's biggest find in 35 years.
Some experts say it could herald a period of new exploration in California and the U.S.
"Certainly this kind of success will send other people back to California to rethink the geology and rethink the theories of the area," said Daniel Yergin, chairman of IHS Cambridge Energy Research Associates and author of the Pulitzer Prize-winning history of the oil industry "The Prize: The Epic Quest for Oil, Money and Power."
Joe Hahn knows firsthand the significance of finding that much crude in California.
A former oil reservoir engineer for Arco, now owned by oil giant BP, Hahn said that exploration in the state has been rife with failures and false leads.
"We had considerable acreage that turned out to be good as goat pasture," said Hahn, now a professor at Pepperdine University's Graziadio School of Business and Management. "It's very rare to have a find of this size" this late in California's oil-production history.
Despite steady petroleum output declines from about 394 million barrels at the 1985 peak to about 214.5 million barrels last year, California still ranks fourth in the nation behind the combined federal offshore drilling sites and Texas and Alaska.
Bruce Bullock, executive director of the Maguire Energy Institute at Dallas' Southern Methodist University, said there has been renewed interest in many old oil regions long believed to have given up most or all of their crude.
"We're seeing quite a bit of activity," Bullock said. "A: They think they can find more oil; B: They think they can get it out of the ground."
Over the last decade, Occidental has been actively acquiring leases and drilling rights in California as most other big oil companies have been selling out. But Occidental executives weren't the only people who thought that California might have a surprising amount of oil left to exploit.
The U.S. Geological Survey travels the country to assess petroleum reserves and the potential for new discoveries. In 2003 and again in 2007, its geologists said that it was likely that an additional 4 billion barrels "may be added to reserves in existing oil fields."
As Chazen put it, "we had a small amount of production in California, historically, but we made a commitment to explore in the state. Even so, it has taken us the better part of 10 years to get where we are now."
Occidental executives have kept secret both the location of the discovery and the methods used to find the new oil and natural gas field.
"The way we found it is obviously proprietary," Chazen said. "Other people might own acreage nearby that we will want to acquire."
Chazen wasn't above dropping hints about the holdings, which were painstakingly amassed over several years.
"Most of the land was not held by individuals. Most was held by some kind of corporation or institution, some by the federal government. This wasn't a redwood forest. If you had the water for it, you might be raising cotton,
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