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By JAMES HERRON

 

LONDON—A consortium of energy companies Friday reported a large oil discovery off the coast of French Guiana, opening up a potentially massive frontier of petroleum development along the northern coast of South America.

 

The discovery, made by Tullow Oil PLC, Royal Dutch Shell PLC and Total SA, could buoy hopes about the extent of the world's untapped crude-oil reserves. Most of the barrels still underground are believed to be in the hands of a few countries that restrict access or are trapped in hard-to-exploit regions like the Arctic.

 

Analysts were closely watching the progress of the well, the first ever drilled in that offshore area just north of Brazil.

 

Other offshore areas in South America have proven to be oil-rich, including Venezuela, Trinidad and Tobago, and more recently offshore Brazil. But the new discovery lies in a hitherto unproven region, relatively isolated from the continent's main oil-producing areas.

 

"This is opening a whole new frontier," turning a region that currently lacks significant oil production into one of the world's hottest spots, said Francisco Bello, an analyst with DIInternational, an energy consultancy.

 

London-based Tullow has made a name for itself opening up oil producing areas offshore Ghana and in Uganda. Its success has often made it subject to takeover rumors, although no public offer has ever been made.

 

On the French Guiana news, Tullow shares surged 15% to £14.13 ($22.53) in London trading Friday, defying a broader market slump that pushed Shell down 2% to £20.18 and Total American depositary shares down 3.2% to $45.

 

Tullow, which holds a 27.5% stake in the discovery, operated the well and said oil from the reservoir should be relatively easy to extract. The company also said the discovery proves its theory that major oil finds in offshore West Africa can be replicated in South America.

 

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The Source: How Big Oil Could Shake Off Torpor

Large oil fields have been discovered off the coast of Ghana, yielding a type of crude that is coveted by refiners because it is easier to convert into precious fuels like gasoline. Geologists have long suspected that the area off the coast of French Guiana could be just as prolific because hundreds of millions of years ago, it hugged up against what is now West Africa. When the Atlantic Ocean was just a narrow sea, those rock formations were joined before drifting apart as continental plates shifted.

 

Tullow hasn't offered an estimate of the size of field where the well was drilled, but the company said that new geologic system is even bigger than offshore Ghana, where it has discovered 1.4 billion barrels in the Jubilee field.

 

There are several other prospects around French Guiana, and if drilling on these is also successful, Tullow and its partners could be sitting on 3.5 billion barrels of new oil resources, said Angus McCoss, Tullow's exploration director.

 

Tullow also plans to explore offshore neighboring Suriname and Guyana, starting next month.

 

While French Guiana is largely an unknown territory for the oil industry, the find could give a jolt to oil-exploration efforts. In recent years, there has been much talk about the end of the era of easily accessible and abundant oil. But executives and officials in international energy circles have begun to rethink that calculation following major finds in the Arctic and deep offshore, along with rising speculation about the prospects of "shale oil," an unconventional oil source found in rock-like formations.

 

Tullow managed fairly quickly to bring oil from the Jubilee field offshore Ghana, drilling the first well in June 2007 and extracting oil initially in December 2010. This portends well for South American discoveries sharing a similar geology, while contrasting sharply with more challenging frontier areas, such as the Arctic. When ExxonMobil Corp.and OAO Rosneft signed a major agreement to explore offshore Russia's Arctic coast, they said production wasn't expected until early next decade.

 

"The importance of this result cannot be overstated," said Oriel Securities analyst Richard Rose, referring to Friday's news.

 

Shell is the largest partner in the new discovery, with a 45% share. Total holds 25% and Northpet has 2.5%. With these major oil companies as partners, "certainly we've got the financial muscle and strategic mindset to move fast on this," Mr. McCoss said.

 

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