Deep-Water Oil: Discoveries could help attract investors to Port Isabel

PORT ISABEL - Deep-water oil discoveries that helped attract investors here could make the area a major port for the offshore oil industry, officials said Wednesday.

The discovery of major oil reserves as close as 120 miles off the Deep South Texas coast led investors to form the Port Isabel Logistical Offshore Terminal, or PILOT, Jim Bailey, president of the company, said.

PILOT is subleasing 58 acres from the Port Isabel-San Benito Navigation District to Subsea 7, an international undersea engineering and construction company, Bailey said from offices in Houston.

PILOT is in contact with oil companies such as Shell and Hess to expand their operations to the port, Bailey said.

The company is building fuel tanks that could service oil company ships and provide "evidence that we will make proper investments to commit to the facility," Bailey said.

Those two fuel tanks that port director Bob Cornelison said are under construction will hold 840,000 gallons of diesel.

In addition, Bailey said, the port's channel offers a deep-water passage for ships such as Subsea 7's freighters.

"I certainly think we can provide a point for service that, in my opinion, can't be matched," he said.

Now, areas in states like Louisiana serve as ports for the Gulf's offshore oil industry, he said.

"Port Isabel provides a much closer access," Bailey said. "It's easy to receive supplies at Port Isabel."

Valley Partnership president Bill Summers said that deep-water oil discoveries could make the Rio Grande Valley a major player in the offshore oil industry and change the face of the region, with new jobs from a variety of companies.

"It might be under water, but it's a Valley project," Summers said. "It's something that four or five years ago we couldn't see on the horizon."

Subsea 7, a company that assembles pipe that it ships to offshore oil operations, is expected to attract suppliers to the area, officials said.

"Subsea 7 is a good start," Cornelison said. "We're fully confident that over time we'll be players in the field."

Although oil discoveries in the southwestern Gulf were made in the 1990s, it took new technology to drill deep-water oil to make the reserves viable, officials said.

"This isn't going to happen tomorrow. This is going to evolve over time," Cornelison said. "These plans wax and wane with the price of oil."