Conoco Strengthens its Gulf of Mexico Deepwater

Conoco announced an agreement with Exxon Corporation to exchange interest in 59 deepwater blocks in the Gulf of Mexico. Conoco acquired a 50-percent interest in 29 of Exxon's blocks, while Exxon acquired a 50-percent interest in 30 of Conoco's blocks. Conoco was the sole lessee of its 30 blocks and will retain a 50-percent interest in each. The acreage is in Green Canyon, Garden Banks, Walker Ridge and Keathley Canyon areas in the Gulf of Mexico. "The Gulf of Mexico continues to be one of the great growth opportunities for oil and gas in the U.S., and these newly acquired interests are perfectly aligned with our exploration strategy to focus on deepwater," said Rob McKee, Conoco executive vice-president, exploration production. "This exchange increases our access to acreage and at the same time spreads economic and geological risks." Conoco is a leading deepwater leaseholder in the Gulf of Mexico, with interests in 295 blocks - amounting to 1.2 million net acres (or 1.7 million gross acres) - in water depths up to 10,500 ft. Later this month, Conoco and R & B Falcon will debut their ultra-deepwater drillship, Deepwater Pathfinder. It is the world's first new-build drillship capable of drilling in depths as great as 10,000 ft. Deepwater Pathfinder will spend its first five years drilling in the Gulf of Mexico for Conoco.