by Tony Daltorio, the Investment U Research Team

Not too long ago, seven major oil companies – commonly referred to as the Seven Sisters – controlled their market.

But that was then and this is now. Today, they're scrambling to find new oil fields, while "smaller" companies rock the industry.

That's why there's been so much excitement over the recent discovery of a ‘giant' oil field in the Gulf of Mexico by one of the Seven Sisters, British Petroleum ADR (NYSE: BP).

When international oil companies consider where to invest, they typically have to choose between technically straightforward fields in politically turbulent countries, or politically stable areas that require complex and costly production techniques.

Easily produced, accessible energy resources in secure countries just don't exist anymore; the era of cheap oil is truly over.

But BP has a long history of pioneering new frontiers for oil. The company will go anywhere in its search, from its long-time commitment in Russia to its more recent forays into Angola, Azerbaijan and Iraq, all the time using new technology to drill where other companies wouldn't consider.

That includes the United States, especially in the deep waters off the Gulf of Mexico, which produces about 25 percent of US domestic oil production and 15 percent of natural gas output.

Andy Inglis, BP's head of exploration of production, put it best when he said the company's strategy involves being "in the best basins and the biggest fields."

BP in the Gulf of Mexico

BP has an overall strong position in the US, both in opening up Alaska, and with the assets it acquired in the Amoco and Arco takeovers. And last year, it became the biggest gas producer in the company after acquiring assets from Chesapeake Energy.

It's also the biggest oil producer in the Gulf of Mexico, thanks to the huge – and much delayed – Thunder Horse platform coming on stream. BP now produces about 400,000 barrels of oil equivalent per day.

That project cost over $1 billion to build and another $250 million to repair after Hurricane Dennis knocked the massive structure over on its side. But it's paying off, ramping up production to 300,000 barrels per day, which makes it the second largest US producer, just behind Alaska's Prudhoe Bay.

And that brings us to the company's latest discovery in the Gulf of Mexico: The Tiber field, located about 250 miles southeast of Houston.