Find in a Treacherous Sea

These days big new oil discoveries seem to be turning up everywhere--on the North Slope of Alaska, in western Siberia and off the shores of Indonesia. Even so, the search for oil remains a frantic race to keep up with fast-moving demand. Oil usage in the non-Communist world reached almost 36 million bbl. per day last year and is expected to rise by well over 2,000,000 this year.

Last week Phillips Petroleum Co. announced what it called a "giant" oil discovery--one with at least a billion barrels of recoverable crude--in the North Sea. The new field seems conveniently located: 185 miles southwest of Norway and 200 miles east of Scotland. But it rests 230 ft. under one of the coldest and most treacherous seas a sailor is likely to encounter. Simply pumping out the oil and transporting it to refineries will be difficult and costly.

Some Surprise. Phillips cautiously said that its Ekofisk 2-X well may be capable of producing 10,000 bbl. of oil per day, though company men on the scene hope that further drillings in the immediate area will raise the figure for the whole field to 300,000 bbl. a day. One of Phillips' partners, Petrofina S.A., a Belgian oil company that owns 30% of the venture, estimated that the entire Ekofisk oilfield contains "approximately 7.5 billion barrels." If true, that would be four times greater than the present known reserves in all of Europe and would put the field in the same league with Alaska's estimated reserves of 10 to 20 billion bbl.

Not all European oilmen share Petrofina's enthusiasm. Royal Dutch Shell, which is exploring its own leases in the North Sea, found the estimate a "complete exaggeration." British Petroleum was "slightly surprised" by the find, but an official admitted it was unlikely that Phillips would exaggerate or overestimate. Neither Shell nor B.P. sees North Sea production seriously competing with cheaply transported Middle Eastern crude soon.

The main obstacle that Phillips and others face is the sea itself. Production of more than 200,000 bbl. per day will probably require a pipeline. The most likely place to run the line would be to Phillips' refinery at Billingham on the English coast, 220 miles away. Phillips now estimates that developing the Ekofisk field will cost around $500 million, including a pipeline. Further drilling may inflate that price, but Phillips and the eight other oil companies eagerly exploring under the North Sea figure the potential is worth the gamble.

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