"Last week, BP PLC announced the discovery of a "giant" new oil field about 200 miles off the coast of Louisiana. The oil field is an an area that was once known as the "Dead Sea" in the oil industry, but has since witnessed several discoveries of massive reserves and become one of the most exciting oil exploration regions. Of the Tiber well, a BP spokesman noted, "we believe it's the deepest well ever drilled by the oil and gas industry."
Michael Johnston Reports From ETF Database.
"According to the Wall Street Journal's Russell Gold, the Gulf of Mexico region is appealing to western oil companies for a number of reasons. First, these companies have been shut out of major discoveries in other parts of the world, such as the Middle East and Russia. And discoveries to which U.S. companies may have access, such as those in Uganda, Kurdistan, and Ghana, pale in comparison to the size of the recent Gulf finds," Johnston Reports.
"Gulf oil fields have the potential to be significantly more profitable for oil companies since taxes to the U.S. are significantly less than the combination of royalties, levies, and other payments that foreign governments typically require of western firms. Earlier this year, western companies flowed into Iraq and Brazil to pursue opportunities offered by these governments to develop the oil industries in these countries. But the Brazilian and Iraqi governments impose various restrictions on western companies, limiting their ability to make a profit in these environments," Johnston Reports.
Here are 3 ETF's Johnston says will be significantly impacted by the recent discovery:
- iShares Dow Jones U.S. Oil & Gas Exploration and Production Index Fund (IEO)
- iShares Dow Jones U.S. Oil Equipment & Services Index Fund (IEZ)
- Vanguard Energy ETF (VDE)
Full Story: HERE
