BP said it had made a significant deepwater oil discovery in the Gulf of Mexico.

“The Gila discovery is a further sign that momentum is returning to BP’s drilling operations and well execution in the Gulf of Mexico,” said Richard Morrison, Regional President of BP’s Gulf of Mexico business.

BP, which co-owns the Gila prospect with ConocoPhillips, now plans appraisal drilling to determine the size and potential commerciality of the discovery.

The discovery was offset by the announced of a $1.08bn writedown on a failed well in Brazil. BP said the Pitanga well on Block BM-CAL-13 in the Camamu-Almada basin offshore Brazil encountered oil shows but no commercial quantities of oil or gas.

The well was part of a $7bn acquisition of a package of assets from Devon Energy in 2010.

The Gila discovery was made by an exploration well on Keathley Canyon Block 93, about 300 miles southwest of New Orleans, in approximately 4,900 feet of water. The well, which penetrated multiple Paleogene-aged reservoir sands, was drilled to a total depth of 29,221 feet.

BP has previously announced two other Paleogene discoveries in the Gulf of Mexico – Kaskida in 2006 and Tiber in 2009.

The company, which has battled to overcome the effects of the 2010 oil spill disaster, has been at work in the Gulf of Mexico since the 1950s and has been exploring in the deepwater Gulf for more than a quarter of a century.

Over the past five years, the company has invested more than $55bn in the US.

Mike Daly, BP’s Global Head of Exploration, said: “Gila continues our successful drill out of the prolific Paleogene play system in the deepwater Gulf of Mexico. Subject to successful appraisal, Gila, Tiber and Kaskida together offer the potential for significant future oil developments in the Keathley Canyon area.”

BP owns a majority interest in the Gila discovery which is located approximately 25 miles west of Tiber, also located in the Keathley Canyon area. The lease for Keathley Canyon Block 93 was acquired in the Western Gulf of Mexico Lease OCS Sale 187 in 2003.

Shares in BP rose 0.4pc to 466.75p in early trading on Wednesday.