When energy price is dropping dramatically, environmental regulation is increasing and oil output of the US has exceeded the demand, the business plan of Brian Reinsborough seems against the trend and even crazy.

Just when others are extracting shale gas oil from pastures in Texas and North Dakota by means of hydraulic fracturing and horizontal drilling, Brian Reinsborough, CEO of Venari Resources focuses on where 100 miles offshore in Mexico Bay. He bet a great deal on deep-sea oil, whose cost is up to {cbq:ncontent}.25 billion, ten times than onshore wells of competitor.

Based on private equity, Venari is exploring 5-mile deep oil wells in a sea area of 4,000 feet. The pressure of this depth is up to 15,000 pounds per square inch and the temperature can reach 300 degree. If you wonder about the risk, might as well ask BP.

But so far, he’s been keeping the record of winning more. As a most impossible winner in the prosperous US petroleum market, Venari possesses some largest deep-sea oil field, including Shenandoah, whose reserve is estimated to exceed 1 billion barrels – Its potential value is up to billion even at present low oil price. The other one is Guadalupe discovered by partner company Chevron, and its reserve might be as large as Shenandoah.

Strangely, Reinsborough insisted that the dropping of oil price – by 30% recently – is favorable for his business.

Even the investment onto deep-water huge production platform projects like Jack/St. Malo of Chevron is up to .5 billion and oil price is down to per barrel, the profit is still considerable due to the extremely large scale and abundant reserves – one single oil well produces 20,000 barrels.
Now the price of per barrel has already put shale oil manufactures in a dilemma. ‘Isn’t it ironic?’ Reinsborough said, ‘A lower price made our business more attractive.’

This is true. But if Venari wants to turn 10 to 15% shares of these oilfields into money, it will take years and billions of dollars to construct platforms and transportation lines. However, investors of Reinsborough are very patient.

‘In short term, they are doing pretty well.’ Manager Seon Hwang of Warburg Pincus said. To make Venari act, Warburg Pincus invested {cbq:ncontent}.5 billion and raised another .3 billion in this summer.

‘They have just opened a small window.’ John Snedden, a geophysics professor of Texas University. ‘They are clearly aware of who to cooperate with and what to avoid.’

The deepest water area of Bay Mexico had used to be a huge hope of US oil future, but it was forgotten in the great mass fervor of hydraulic fracturing exploration.

In 2010, due to the tremendous leakage of BP Macondo oil well, the risk of deep-water drilling was too high for everyone in a controversial view and the data on balance sheet were astonishing.

But Reinsborough did not agree. When the drilling platform of BP company exploded, he acted as the president of Nexen in charge of the US business.

In the previous 10 years, he turned the Bay Department of Nexen into a first-class organization (CNOOC bought this company in 2012 by billion).

After the BP oil leakage accident, oil exploration in Bay Mexico was stopped by President Obama, which made Reinsborough quite anxious. In 2011, with the support of Warburg Pincus, Reinsborough decided to leave Nexen and created a deep-sea exploration company.

‘Those were the darkest days of Mexico Bay deep-water exploration.’ He said. But he insisted that the disaster of BP is a company problem not a field one.

‘I expected to enter this line and make something big.’ His reason was that ‘permitorium’ resulted in a two-year blankness of deep-sea exploration. ‘Considering a lot of depressed projects, I think the best strategy is to take the lead in exploring.

Reinsborough decided early that Venari would not explore and develop independently but invest drilling projects in cooperation with Chevron and Anadarko Petroleum.

The key to this strategy is to select an appropriate partner. The decision of Venari team relies on their deep understanding on the geography of Mexico Bay, which not only obtained the support of strong calculating capacity but also benefited from the arithmetic design he called a ‘trick’, finding rules in noises.

Oil field exploration under salt formations asks for more tricks, since salt formations disturb sound waves. So far, 50% wells Venari invested are discovery wells, which beat the average level of one third discovery wells in deep-water exploration. ‘ We never drill rashly.’ Reinsborough emphasized.

However, a drilling well named ‘Coronado’ was so disappointing in this summer that partner ConocoPhillips thought it was of no worth at all and withdrew from this adventure. ‘The first discovery was inspiring.’ The drilling supervisor of ConocoPhillips said in a recent quarter tele-conference. But the second ‘evaluation’ well was ‘too disappointing’.

But Reinsborough still thinks highly of ‘Coronado’ and his own plan.

In a federal offshore drilling lease auction, Venari was the highest bidder in 15 areas and the expense was nearly {cbq:ncontent}.9 billion, including a highest one with .5 million. Due to the bright prospect, it was called ‘Buddha’s Brew’.

In five years after Deepwater Horizon Exploration, cloud dissipated gradually. An analyst of Wood Mackenzie predicted that Mexico Bay output would reach 1.9 million barrels per day in 2016. ‘What is reassuring is that this line is more prepared and safer than before.’ Reinsborough said, ‘The Bay is coming back.’

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