Repsol Hits More Oil In Gulf Of Mexico Shenzi Field

Spanish oil firm Repsol YPF SA (REP,REP.MC) has struck more oil in two wells in the U.S. Gulf of Mexico in what a company spokesman calls a "fairly sizable" oil find.

Repsol found the crude in wells of the Shenzi field, where it and production operator BHP Billiton Ltd. (BHP,BHP.AU) started output in June, Repsol Chairman and Chief Executive Antonio Brufau told Dow Jones Newswires in an interview last week.

The companies currently produce about 120,000 barrels of oil of crude a day from Shenzi, already surpassing initial production targets for an output of 100,000 barrels a day.

Repsol, with a 28% stake, is leading exploration at the deep offshore field, while BHP is lead operator for production from the field, with a 44% stake. Hess Corp. (HES) also holds a 28% stake in Shenzi.

Repsol said it has discovered an additional 497-foot oil column in the G104 well of the Shenzi field, where earlier a 68-foot oil column had been found deeper under the seabed.

"Further evaluation is underway to assess the future development potential of these shallower intervals," Repsol spokesman Kristian Rix said.

The Repsol-led exploration consortium also found an additional 30-foot column in the Shenzi-8 appraisal well, where it already had discovered a 100-foot oil column in November 2008.

Repsol didn't give a reserve estimate for the new finds, but Rix said the two discoveries are "fairly sizable" and easy to bring on stream due to their proximity to already producing wells.

"In four to five years, we could produce much more from Shenzi," Chairman Brufau said.

The new discoveries at Shenzi add to Repsol's recent streak of massive discoveries.

On Sept. 17, a consortium including Repsol announced an oil discovery in deep waters off the coast of Sierra Leone, which could open up a whole new oil province off West Africa.

On Sept. 11, Repsol announced a gas discovery in shallow waters of the Gulf of Venezuela, dubbed Perla, that it says contains an estimated 1 billion to 1.4 billion barrels of oil equivalent, or BOE. Repsol will have a 32.5% stake of that if the field is going to be developed.

Also in September, production tests indicated that the Guara field in Brazil's Santos Basin contains a light crude and gas volume of up to 2 billion BOE. Repsol has a 25% stake in the block that contains Guara, while operator Petroleo Brasileiro SA (PETR4.BR,PBR) holds 45% and BG Group (BG.LN,BRGYY) 30%.

Repsol shares closed 1.8% higher at EUR18.61 in Madrid on Thursday.

-By Bernd Radowitz, Dow Jones Newswires; [e-mail]; [phone]