London-based British Petroleum PLC said it has made a 'giant' oil discovery that may contain as much as one billion barrels recoverable reserves.

The find was made in the Gulf of Mexico approximately 250 miles southeast of Houston, Texas at BP’s Tiber Prospect in the Keathley Canyon block 102.

According to rig contractor Transocean Ltd., the well was one of the deepest ever sunk by the industry, measuring over 35,000 feet in 4,130 feet of water.

"Tiber represents BP’s second material discovery in the emerging Lower Tertiary play in the Gulf of Mexico, following our earlier Kaskida discovery," said Andy Inglis, chief executive of exploration and production at BP.

The location will undergo further appraisal in order to determine the amount of oil present in the reserve. BP says that it believes the find may be bigger than its Kaskida discovery in 2006 which contains over three billion barrels of oil. Over 20 percent of the oil may be recoverable.

The find has reaffirmed the Gulf’s strategic importance to the industry. According to Inglis, the find has furthered interest in deepwater development in the Gulf of Mexico.

British Petroleum is the largest producer in the United States and the largest lease holder in the Gulf. The company has a 62% stake in the field. It currently has nine projects in the U.S. Gulf of Mexico.

According to analysts, the find may ease concerns about peak oil prices. However, it may be years before the area starts producing.

The Gulf of Mexico has increasingly become important to Western oil companies as oil-rich countries like Saudi Arabia, Russia, and Venezuela leave their richest fields for state-owned companies.

High profit margins, political stability, and relatively low tax has also made the Gulf especially attractive.