Conoco, Unocal Find Deepwater Oil Near New Orleans

Conoco Inc. and Unocal Corp. discovered oil with their K2 exploration well in the Green Canyon Block 562 in deep water in the Gulf of Mexico, Conoco said. Work on the well, located about 180 miles (290 km) south of New Orleans, has been suspended to study the significance of the find, a company spokesperson said. The K2 well, started May 17 in 3,900 ft. of water, was suspended to "allow us to plan a safe and cost effective appraisal of the hydrocarbon zone we have encountered, as well as continue to explore the deeper objectives," said Conoco Executive Vice President Rob McKee. McKee also said the well had encountered oil in a high-quality reservoir and the company was encouraged by the results to date, although the commercial significance is yet to be determined. Conoco and Unocal each hold a 50-percent interest in the Green Canyon 562 block. The deepwater Pathfinder drillship, which is being moved to Mississippi Canyon Block 1002, is expected to return to the location next spring, which is the earliest the ship's drilling schedule will allow, Conoco also said. The Green Canyon prospect is the second well and second discovery drilled by the Conoco and R&B Falcon drillship. The ship's first well was on Garden Banks Block 783. McKee said the companies plan to penetrate some deeper objectives with a different well configuration when drilling is resumed.