Chevron Corp. and two partners said yesterday they had tapped a potentially huge source of new oil in the Gulf of Mexico's deep waters, fueling hopes that further discoveries in the region could help ease the United States' oil-supply woes.

The successful test of the deepest oil wells ever drilled showed such promise that some believe the undersea oil pool could rank as the largest discovery of crude since Alaska's Prudhoe Bay began flowing nearly 40 years ago.

"An opportunity like this only comes once every few decades," said Daniel Yergin, chairman of Boston-based Cambridge Energy Research Associates. "It holds out the prospect that this means more supply, and more supply is good news for consumers."

The geologic formation being targeted by Chevron's group and others could begin producing oil steadily as early as 2012, and could yield 800,000 barrels per day of crude, or about 11 percent of total U.S. production, according to an August assessment of the region from Yergin's group.

San Ramon, Calif.-based Chevron, whose partners include Devon Energy Corp. of Oklahoma and Norway's Statoil, would not quantify the size of its find, except to note that the deep-water gulf could hold between 3 billion barrels and 15 billion barrels of oil — at the high end, a more than 50 percent boost to U.S. petroleum reserves.

After a year of mostly bad news about oil supplies, investors celebrated the fresh discovery yesterday by sending up stock prices — including those of Chevron, Devon and Statoil — and by further trimming the price of oil futures.

Motorists, however, should hang on to their hybrids.

IT'LL BE EXPENSIVE

Although the discovery suggests that the undersea region holds more oil than previously expected, experts warn that the crude will be expensive to extract and years in coming.

What's more, the growing demand for oil in the U.S. and elsewhere could quickly eat away the production gains from the gulf. And, there is the uncertainty that comes with trying to figure out how much oil lies so far beneath the Earth's surface.

"It's phenomenal, if it's there," said Matthew Simmons, who heads Simmons & Co., a Houston investment banking company that specializes in energy. "But until you get a field on production, you don't really know what's there. ... It's a roll of the dice."

Simmons said the gulf has yielded several highly touted oil finds over the years that ultimately fizzled and fell short of expectations.

The Chevron project, dubbed Jack, is 270 miles southwest of New Orleans. It is one of a string of oil discoveries that began in 2002 in the lower-tertiary formations off the coasts of Louisiana and Texas, miles below water and deep into the Earth's surface.

So far, there have been more than a dozen discoveries in the ancient sea rock with names like Great White, Tiger, Silvertip, St. Malo and Cascade, according to experts. Last week, oil giant BP added its Kaskida project to the list.

Chevron's recent test well stands out, however, because it is the first among the group to take a stab at oil production. The company's well produced a steady flow of 6,000 barrels per day of high-quality crude, but the flow was limited intentionally to avoid exceeding the test facility's capabilities, Chevron spokesman Donald Campbell said.

The test "helps us understand that the oil can flow through the rocks and it can flow at a commercial rate," Campbell said. "This is an example of how companies, investing in technology, are finding oil and gas today in places where we couldn't go 15 to 20 years ago."

DWINDLING PRODUCTION

Chevron's success could add urgency to the other projects in the same region, said Robert Esser, director of global oil and gas resources at the Cambridge research group, and author of two studies highlighting promising projects such as those in the deep waters of the Gulf.

It comes at a time of dwindling production for U.S. oil fields as well as a steep drop in output at Cantarell, the giant oil field belonging to Mexico, the second-largest U.S. petroleum supplier. The U.S. burns through about 5.7 billion barrels of crude a year and has about 22 billion barrels of oil reserves. Saudi Arabia's oil reserves are believed to exceed 250 billion barrels.

"This is the most significant thing that's occurred in U.S. oil in years, in that it proves that this formation is capable of flowing in economic terms," Esser said.

Chevron's well is among the deepest ever drilled, extending through 7,000 feet of Gulf waters and then 20,000 feet more below the sea floor. From the rig to the bottom, the well measures 28,175 feet — more than five miles — and is a record depth for the Gulf of Mexico, Chevron said.

NEW WELL PLANNED

The company's first well for the 34,500-acre project was in 2004, which confirmed the presence of oil. Chevron and its partners plan a third well next year to help determine the size of the project's reserves.

Chevron, the largest holder of leases in the deep-water Gulf region, would not estimate the cost of the project and would not say when it might give a final go-ahead for building a massive and costly production rig to extract the oil. If the partners decide to develop the field, production would follow in about six or seven years, Chevron said.

In New York futures trading yesterday, the October contract for U.S. benchmark light sweet crude — the type of oil discovered at the Chevron project — fell 58 cents to $68.60 a barrel on the New York Mercantile Exchange. Oil has more than tripled since early 2002 but is down from the peak of $77.03 a barrel in July.

U.S. stocks greeted the news by rising in light trading volume, with the Dow Jones industrial average rising 5.13 points, or 0.04 percent, to 11,469.28. The Standard & Poor's 500 Index added 2.24, or 0.2 percent, to 1313.25. The Nasdaq Composite Index climbed 12.54, or 0.6 percent, to 2205.70.

Chevron stock rose $1.51, or 2.3 percent, to $66.34. Devon shares climbed $7.99, or 12 percent, to $72.14, the biggest daily gain since May 1992.

The news from Chevron gave additional ammunition to industry lobbyists and lawmakers who favor opening restricted areas of the U.S. coastline to oil drilling.

Rep. Joe Barton, R-Texas, a longtime backer of increased offshore drilling, yesterday hailed the Chevron oil find.

"The discovery of oil that isn't half a world away and that might increase our country's petroleum reserves by billions of barrels in one swoop will do wonders for assuring American drivers can get gasoline at a price they can afford to pay," Barton said in a statement.