First oil well since BP spill starts production

HOUSTON (BestGrowthStock) – Marathon Oil Corp’s start of oil production from a deepwater well in the Gulf of Mexico is the first since the U.S. government halted drilling after the massive BP oil spill, officials said Monday.

Marathon’s well, in 3,000 feet of water, was already drilled at the time of the spill and awaited completion, an oil field term for opening it to flows of oil or gas.

The U.S. government’s moratorium on offshore drilling allows some activity, including well completion, to continue.

The U.S. Bureau of Ocean Energy Management, Regulation and Enforcement confirmed Marathon’s new production at its Droshky project is the first since the federal government halted drilling after BP Plc’s well blowout.

The Droshky development began production on time and cost less than its projected budget of $1.3 billion, Marathon said.

Marathon owns a 100 percent working interest in Droshky, which is expected to produce about 50,000 net barrels of oil equivalent per day at its peak.

The project consists of four development wells tied back to the Bullwinkle platform. At a final development cost of less than $900 million, the initial stage of development is expected to produce 35 million of the estimated 60 million barrels of oil equivalent (boe).

Future recovery will largely depend upon well performance, the Houston-based company said.

Shares of Marathon rose 8 cents to close at $31.79 on the New York Stock Exchange.

Stock Market Today

(Reporting by Anna Driver and Bruce Nichols in Houston; Editing by Lisa Shumaker)

First oil well since BP spill starts production