Additional Application Summary of the Article

Additional Application
Summary of the article:
Chevron Reports Major Oil Field Find
By Elizabeth Douglass
Los Angeles Times
September 6, 2006
On September 5, 2006 Chevron Corp. and its partners Devon Energy Corp. of Oklahoma and Norway’s
Statoil announced the successful test-drilling of a potentially huge new oil source 270 miles southwest of
New Orleans, in the deep waters of the Gulf of Mexico. From a test well extending more than 5 miles in
depth, Chevron was able to extract 6000 barrels of high-quality crude oil per day. With estimates of
anywhere from 3 billion to 15 billion barrels of crude oil beneath the Gulf of Mexico, Chevron’s discovery
could rank as the largest crude oil find in nearly 40 years. Although steady production would still be several
years off, this discovery could eventually yield 800,000 barrels of crude oil per day, more than 10 percent of
total U.S. production.
Improved technology has allowed companies like Chevron to search for oil in places where it would have
been impossible only 20 years ago. While experts say the oil will still be expensive to extract and could take
years to accomplish, the development and use of deep-water drilling technology has shown that oil can be
retrieved from such previously unreachable depths and in commercially viable quantities.
The discovery comes at a time when U.S. and world demand for oil is increasing, and production from U.S.
oil fields has slowed considerably.
-Technological advancement in oil exploration will, ceteris paribus, _______ the supply of oil, shifting the supply curve _______.

A) decrease; down and to the right
B) decrease; up and to the left
C) increase; down and to the right
D) increase; up and to the left