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By   /   Friday, April 16th, 2010  /   Comments Off on Oil

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ExxonMobil has set a new record for slant drilling from an oil platform off the coast of Santa Barbara County, setting the stage for decades of more tension between energy companies and environmentalists as new technology unlocks billions of barrels of oil.

Houston-based Exxon said April 16 that it had drilled more than six miles horizontally, for a total reach of more than seven miles, from its Heritage platform in federal waters 8.2 miles off the coast near Gaviota. The company said the well will produce an extra 5.8 million barrels of oil from its Santa Ynez unit, which is made up of three platforms and has produced 450 million barrels of oil since 1981.

Exxon said the oil wouldn’t have been reachable before.

“These new tools and lessons learned from our recent work off Russia’s Sakhalin Island have been key in helping us reach these resources safely and efficiently,” Kok-Yew See, Exxon’s U.S. production manager, said in a news release.

There may be as much as 3.4 billion barrels of oil off the tri-county coast, according to research by Tom Bjorklund, a professor at the University of Houston. Rock Zierman, chief executive of the California Independent Petroleum Association, said slant drilling technology puts much of the California coast’s reserves in play.

“If you do a seven-mile radius around the existing platforms, you would pick up most of what’s actually out there,” Zierman said. “We have so much reachable oil from either onshore facilities or existing platforms that to my knowledge, there are no companies even contemplating new platforms.”

Exxon’s drilling record comes as environmental groups are attempting to revive a deal with Plains Exploration & Production Co., or PXP, another Houston firm that operates offshore platforms off northern Santa Barbara County.

PXP would get to drill from its platform in federal waters into a state oil lease, in exchange for agreeing to donate land and remove an offshore platform and an onshore processing plant. Citing concerns over opacity and enforceability, state regulators shot the deal down last year, but the parties have tweaked it for another try.

Linda Krop is chief counsel for the Santa Barbara-based Environmental Defense Center, one of the groups that negotiated the proposed PXP deal. She said new slant drilling technology means existing platforms near known-but-untapped oil reserves “could be operated for decades to come.”

“That’s why we were so excited about negotiating end dates for these platforms,” Krop said. “Slant drilling really is the big threat, in our eyes, in the perpetuation of oil production.”

Krop hopes state officials will approve PXP’s removal of onshore processing plants. That would mean a new oil company would have to build out its own facilities, which could add costs and prove difficult to navigate with Santa Barbara County air regulators, Krop said.

“If our agreement is not approved, you’ve still got all the infrastructure in place,” she said. “The company would still have to go through the leasing process [to drill], but the infrastructure would still be there and it would be much more feasible and economical.”

Economics and the price of oil play a big role in whether companies drill. Zierman said slant drilling remains more expensive than straight wells but is becoming more cost-effective.

“Technology has improved vastly, and as the price [of oil] is steady or rising, more of the oil becomes recoverable economically,” Zierman said. “We had a wild ride up and down in 2008, but today it’s been more stable.”

Exxon started working on slant drilling technology off the tri-county coast in 2007, when it reached into new territory, the western Sacate oil field, from its Heritage platform.

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