Oil moves in Mexico

HOUSTON (Reuter) - Shell Oil and British Petroleum are to develop the Mars field in the Gulf of Mexico, the largest oil and natural gas discovery there for 20 years.

Shell said about dollars 1.2bn would be spent on the first phase of development, designed to recover an estimated 500 million barrels of oil and natural gas equivalent. Mars is expected to yield more than 700 million barrels.

BP said it would spend about dollars 340m developing its share of Mars, discovered by Shell and BP in 1989. The field lies in Mississippi Canyon Block 763, 130 miles south-west of New Orleans.

First-phase production is scheduled to begin in late 1996 and will reach a daily peak of 100,000 barrels of oil and 110 million cubic feet of gas.

The field, operated by Shell, with BP holding a 28.5 per cent interest, will set a depth record for the Gulf of Mexico, in 2,933 feet of water.