"China's biggest oil firm, PetroChina, says it has made the country's largest crude discovery in a decade." -- BBC News
"China has made its largest oil find in more than three decades ... " -- Forbes.com
"Shares of PetroChina Co., the nation's top oil producer, surged after the company announced China's biggest discovery in half a century." -- Bloomberg
Golly, sounds like they found a lot of oil over there in China! Unfortunately, no one seems to be able to tell us how much -- with any accuracy, that is. All the media outlets seem eager to throw high-end estimates out there, in a similar fashion to what we saw with Chevron
So America has been cured of its dependence on foreign oil as a result of that discovery, right? No, the headlines didn't go that far. US crude oil demand is sitting around 20 million barrels per day, so aggressively assuming that 15 billion barrels are recoverable from the lower tertiary play, that would hold us over for, oh ... two years. We're saved!
Turning to PetroChina's
Now, this is undoubtedly a valuable find for PetroChina. The shallow pay will make the reserves much easier to extract than those sitting about 5 miles under the deepwater Gulf's surface. The moderate boost in shares since the announcement seems reasonable, but I wouldn't go chasing the stock here. Production is several years away, and the company is likely to experience muted near-term profit growth in the face of higher drilling costs as it ramps up spending 25% this year. This one find is not enough to place PetroChina among the ranks of world-class explorers like ExxonMobil
More oil Foolishness:
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Fool contributor Toby Shute welcomes your feedback. He doesn't own shares in any company mentioned. The Motley Fool has a world-class disclosure policy.