Where is Location of Strike Big Oil

The discovery, which it claims amounts to 6 billion barrels of light oil, was based on two wells drilled this year and 126 square miles of three-dimensional seismic data. The company estimates it to have 1.8 to 2.4 billion barrels of recoverable oil.

He added that Caelus, which is backed by the private-equity fund Apollo Global Management, was drawn to Alaska by tax credits the state offers to companies that search for oil. These tax credits have offered incentives for producers to search for oil, but have also been a point of heated debate recently among state lawmakers scrambling to save funds amid the more than two year long drop in oil prices of around 60%.

 Its evaluation of the discovery is not complete — Caelus said it had not flow-tested the wells and it plans to drill another appraisal well in 2018. If the find proves to be as substantial as Caelus believes, and with the regulatory process expected to take between three to five years, Caelus projects that oil could flow to the trans-Alaska pipeline in 2022.

Caelus added that the field could produce around 200,000 bpd of light, high mobile crude, which would, if correct, make the field more prolific than ConocoPhillips’ Alpine unit that began production in 2000 and reached a production peak of 139,000 bpd in 2007.

However, Caelus’ field would still pale in comparison with several of the world’s largest oil fields. Saudi Arabia’s Ghawar oil field, discovered in 1948, is the largest conventional oil reserve in the world with an estimated 70 billion barrels of oil remaining.

It produces around 5 million bpd of crude. However, the actual amount of oil reserves at Ghawar is a closely held state secret. Some analysts claim that as much as 60% of all Saudi production is derived from Ghawar. The U.S. Energy Information Administration (EIA) states that Ghawar has more oil reserves than all but seven other countries.

Kuwait’s Burgan field, discovered in 1938, holds an estimated 66 to 72 billion barrels of reserves, which accounts for more than half of Kuwait’s total, producing between 1.1 and 1.3 million bpd. It didn’t start production, however, until around 1948.

The Safaniya field, also in Saudi Arabia, is estimated to hold around 50 billion barrels of oil, but it is also very mature and has been in production for around 60 years.

Iraq also has holds some of the largest oil fields in the world. Its Rumaila field holds an estimated 17.8 billion barrels of oil, while its West Qurna-2 field is the country’s second largest, holding nearly 13 billion barrels of oil reserves.

The Bakken field in the U.S., discovered in 1951, has 24 billion barrels of reserves remaining, and produces around 1.4 million bpd.

Alaska is also suffering from other maturing fields, while new discoveries have been unable to offset this decline – which makes the Caelus discovery so promising for the state.

Not only has the state suffered oil production losses, but the current roil in global oil prices has also caused budget deficits for Anchorage, creating political turmoil as Alaska Gov. Bill Walker tries to find ways to offset lost revenue.

Another blow to the state came when three of the four Alaska LNG project partners, ExxonMobil, BP and ConocoPhillips, pulled out last month after a study prepared by energy consultancy Wood Mackenzie said the project was “one of the least competitive” LNG projects in the world.

Walker, for his part, is still optimistic that the project can go forward, but given the glut of LNG that is projected to last past 2020 and the drop in LNG prices from more than $20 per million British thermal units (MMBtu) in February 2014 to just over $5/MMBtu in Asia currently, the Alaska project’s intended market, Walker faces strong headwinds as well as political infighting in Anchorage to keep the project proposal alive.

Caelus’ discovery comes less than a month after Apache announced a multi-billion barrel oil discovery in Texas.