Now Occidental ( OXY - news - people ) is breaking ranks in another way, by upsetting the commonplace view that the days of "easy oil" in the U.S. are over. Last year Oxy announced a new find outside Bakersfield, in Kern County, Calif., which is shaping up to be the biggest onshore oil discovery the U.S. has seen in three decades. It likely holds more than 1 billion barrels of oil (and natural gas equivalents) that will be easy and cheap to extract.
That the gusher is situated in a hydrocarbon basin that has been picked over for 100 years validates the philosophy extolled by Oxy President Steven Chazen and Chief Executive Ray R. Irani: The best place to find new oil is in old oilfields. It also raises the tantalizing prospect of lots more easy oil awaiting discovery in the U.S. That would not only help reduce reliance on foreign oil but also be far cheaper than deepwater oil--it costs roughly $10 per barrel to get oil out of this ground versus $30 (including extraction taxes and royalties) or more for deepwater projects. "It's similar to the economics you have in the Middle East," says Irani.
