Adding to the challenge: The oil that Chevron was pursuing lay beneath a thick layer of salt, which disrupts seismic sound waves and blurs the images like a smudge on a camera lens. The company had to analyze the data with supercomputers to clear up that distortion.

The analysis revealed a potentially huge oil reservoir. Even so, Chevron estimated it had only a one-in-eight chance of finding commercial quantities of oil. The only way to know for sure was to drill.

So, in 2002, Chevron spent about $100 million to sink its first well in the field, which came to be known as Tahiti. That well needed to hit a 200-foot-long target from five miles away -- akin to hitting a dart board from a city block away.

"You have to roll the dice, and the dice roll now is north of $100 million," says Gary Luquette, president of Chevron's North American exploration and production division.

Chevron's first Tahiti well struck enough oil to make it worth more drilling to see how big the field might be. By 2005, the company had learned enough to go forward with the project. That required building a 700-foot-tall, 45,000-ton floating oil-production platform, and drilling a half dozen wells to feed oil to it. Tahiti produced its first commercial quantities of oil in May.

On a recent morning, the Clear Leader rolled on the waves 190 miles south of New Orleans, held almost perfectly in place by its satellite-controlled navigation system and six Korean-made engines.

In a cabin on the ship's deck, a team of drillers in coveralls monitored computer terminals as they used joysticks to control a drill bit more than 12,800 feet below. The oil they were targeting lay another 14,000 feet underground -- an easy reach for a ship that can drill down 7.5 miles.
The well is part of a second phase of the Tahiti project, which will require drilling several more wells and expanding the floating platform -- an additional $2 billion in spending, still with no guarantee of success.

Eoin Treacy's view The fact that independent oil companies are being pushed out of the better land based prospective drilling sites and that the best unexplored territory is offshore further emphasises the argument that peak oil is best defined as the rising cost of production. Deep water oil production is only economic at relatively high oil prices and this favours companies with the expertise, capital and infrastructure necessary to drill.

Transocean's share price collapsed with the price of oil in 2008. It bottomed a year ago and has since doubled. It has been consolidating mostly above $80 from September and a sustained move below that level would be required to question scope for further higher to lateral ranging.

Chevron has posted a progression of incrementally higher lows since October 2008 and is currently testing the psychological $80. A downward dynamic would be needed to hinder potential for a successful break above this area.

Anadarko Petroleum has been trending consistently since bottoming in October 2008. It is currently rallying from the lower side of another similar sized range and a sustained move below $55 would be required to question the integrity of this impressive uptrend.

Petrobras' ADR continues to consolidate around $50, following an impressive advance from the 2008 low. A sustained move below $44 would be required to question the integrity of the medium-term uptrend.

Tullow Oil has posted a stellar performance over the last 15-months; more than tripling. It has lost momentum of late but a sustained move below 1100p would be needed to question the progression of higher reaction lows.