French oil and energy group Total said on Wednesday that it had made a significant oil discovery at the Ballymore prospect in the deep offshore in the US Gulf of Mexico, its largest discovery in the area, reports Reuters.
"This major discovery gives us access to large oil resources and follow on potential in the emerging Norphlet play," Arnaud Breuillac, Total's president for exploration and production, said in a statement.
"While already deemed commercially viable, we will work together on the appraisal of this discovery and a cost-effective scheme to ensure a rapid, low breakeven development," he added.
An assessment of the resource estimate was ongoing, the company said, adding that the discovery will bolster Total's new exploration strategy put in place since 2015.
The Ballymore prospect covers four blocks in the Norphlet play, including Block MC 607 where the discovery was made.
Total's acquisition of a 40 per cent working interest in Ballymore was part of an exploration agreement along with Chevron, which has 60 per cent, signed in September 2017.
Another report from London adds: Oil fell for a third day on Wednesday, but remained on track for its biggest gain in January in five years, in spite of data that showed US crude stocks rose more than expected last week and a broader selloff in other commodities, stocks and bonds.
Brent crude LCOc1, the global benchmark, was down 49 cents at $68.43 a barrel by 1015 GMT, after touching a two-week low earlier in the day. US West Texas Intermediate (WTI) futures CLc1 were down 39 cents at $64.11.
On Tuesday, US crude fell 1.6 per cent to close at $64.50 a barrel, far outpacing a 0.6 per cent drop in the price of Brent.
"The extent of the latest pullback in oil prices has taken many by surprise. Whether this weakness will be short-lived or are we witnessing the precursor to a violent downside correction remains to be seen," PVM Oil Associates strategist Stephen Brennock said.
"Still, what is apparent is that positives are increasingly in short supply for skittish buyers and the early-year optimism is hanging by a thread."
Prices of WTI and Brent are still on track for a fifth month of gains and Brent is set for its largest per centage increase in the month of January since 2013, with a rise of 2.7 per cent.
But as prices have risen, US producers have increased their rig count. Energy companies added 12 oil rigs last week, the biggest weekly increase since March.
"The rig count will only continue to rise and the US system will only become more efficient," said Matt Stanley, a fuel broker at Freight Services International in Dubai.
"I see a correction on the horizon down towards $60 before the inevitable OPEC minister comes out and talks about new cuts," he added.
