Another observation about Deepwater: there’s not much infrastructure. And it’s twice as far to shore as most Shelf locations.

 

Consequently, Deepwater economics are very tough. Fields must be big to justify all the cost to drill and equip them.

 

Published estimates for the Lower Tertiary Trend (not just one field) rate the resource potential at 3 to 15 billion barrels. That’s an impressive number, but Chevron spent something like $265 million on its Jack well test, and at this point they have more questions than answers. The reservoir rock has very low permeability and will require multiple expensive fracture treatments to produce at commercial rates. The oil is heavy and without much entrained gas that might help it produce.