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Reuters: INTERVIEW: Shell sees decision on deepwater GOM field this year

NEW YORK, Sept 7 (Reuters) – Shell Exploration and Production Co. expects to make an investment decision on a potentially large deepwater oil and natural gas field in the U.S. Gulf of Mexico this year, a company official said.

The Great White field could eventually pump 130,000 barrels of oil equivalent per day of natural gas and crude for the U.S. market, according to figures from Shell, part of Royal Dutch Shell .

“I anticipate we’ll make (the investment decision) between now and the end of the year,” Marvin Odum, Shell’s executive vice president of exploration and production in the Americas, told Reuters in an interview this week.

Odum said Great White is located in the Gulf’s lower tertiary region — a bed of ancient undersea rock where Chevron announced a big discovery this week.

Better basin imaging technology and growing oil company expertise in navigating very deep waters are enabling development of reserves in less accessible areas of the Gulf of Mexico, home to about a quarter of U.S. oil output, he added.

“Whether you are in the conventional parts of the deepwater or in the really extreme parts of the deepwater, imaging can allow you to find more oil and gas that you couldn’t have seen before, Odum said.

The announcement of Chevron’s drilling results at the Jake prospect, located 270 miles southwest of New Orleans, has sparked hopes the lower tertiary deposits could help stem declines U.S. domestic oil production.

But Odum said while the Gulf of Mexico will remain a key producing region of the world’s biggest energy consumer, it was unclear if new discoveries could counter decline rates at existing fields.

“It’s going to continue to be very important from a total output standpoint, whether there is real growth potential meaning to grow above volumes we have today or if it is just replacement volumes,” the Shell official said.

U.S. oil production has been in decline for decades and development of reserves from the Gulf of Mexico have been eyed as key to stemming that slide.

U.S. oil prices hit record highs over $75 a barrel this year as global supplies struggle to keep up with increasing demand, raising concerns that high energy costs could hurt economic growth. 
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