BP said that the oil discovery was made at its Gila prospect, 300 miles to the southwest of New Orleans. The size of the oil discovery remains unknown and will require appraisal drilling to ascertain. The oil discovery is 4,900 feet deep in the Gulf of Mexico, the Wall Street Journal notes.
The Gila prospect is a joint venture between BP and ConocoPhillips (COP), with BP the majority owner. The oil discovery was made in reservoir sands in the Keathley Canyon, which date to the Paleogene period, which extended from 66 million to 23 million years ago.
News of the oil discovery came as BP announced a $1.1 billion writedown to be taken during the fourth quarter for unsuccessful offshore drilling in Brazil, Reuters notes.
BP finished a $40 billion asset sales this year to fund the remaining costs of the cleanup of the 2010 explosion and sinking of the Deepwater Horizon drilling platform, which spilled millions of gallons of oil into the Gulf of Mexico.
In Wednesday morning trading, BP stock climbed almost 1%, while COP shares rose modestly.