Houston (Platts)--19Feb2008

Oil production results from the first generation of deepwater Gulf of
Mexico discoveries show key projects generally have achieved total output
goals, contradicting some criticism by "peak oil" theory proponents, research
shows.

Operators have already extracted 83% of the total oil reserves expected
from the seven highest profile deepwater discoveries of the 1990s, with
production of 1.5 billion barrels through 2007, according to the research,
which was gathered by Platts.

That total compares with expectations for total oil reserves of 1.8
billion barrels from those fields by the operators and the US Minerals
Management Service.

Outspoken peak oil proponent Matt Simmons reacted to the data, however,
by emphasizing the implications for decline rates rather than total
production.

"I rarely pay attention to total reserve recoveries as once a field is in
irreversible decline the final amount that will be recovered no longer matters
for boosting supplies," Simmons replied to the Platts research by email.

But Mike Prendergast, chief of staff for the MMS in the Gulf of Mexico,
said the results indicate "most of these facilities have served very well and
that production has come up into what they expected."

And industry consultants who have opposed Simmons in the peak oil debate
cited the study as verification of their position.

"It looks like the companies are doing a pretty good job of estimating
what is there," said Steve Trammel, senior product manager for the IHS
consulting firm that now owns Cambridge Energy Research Associates.

"I am very glad someone finally put this false argument to rest," said
Oppenheimer analyst Fadel Gheit. "Simmons is an alarmist and there are many
like him who thrive on spreading fear. There is no oil shortage and whatever
shortage is more imagined than real."

--Gary Taylor, gary_taylor@Platts.com