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* Writedown is $850 mln non-operating item, $230 mlnoperating
* Will be taken in Q4-spokesman
LONDON, Dec 18 (Reuters) - Oil company BP Plc announced a major oil discovery at its Gila prospect in thedeepwater U.S. Gulf of Mexico on Wednesday along with a $1.08billion writedown on a failed exploration well offshore Brazil.
"The Gila discovery is a further sign that momentum isreturning to BP's drilling operations and well execution in theGulf of Mexico," said Richard Morrison, Regional President ofBP's Gulf of Mexico business.
Since the completion this year of a massive $40 billionasset sale program to pay for the costs of its 2010 oil spill,BP has made exploration a priority.
BP, which co-owns the Gila prospect with ConocoPhillips, said appraisal drilling would be required to determinethe size and potential commerciality of the discovery.
BP said it was the third significant discovery it had madein the Paleogene play in the Gulf of Mexico in recent years,following Kaskida in 2006 and Tiber in 2009.
The writedown - flagged in the same fourth quarterexploration update - will be taken as part of fourth quarterresults due to be released on Feb 4, a spokesman said.
It relates to news that the Pitanga well on Block BM-CAL-13in the Camamu-Almada basin offshore Brazil, encountered oilshows but no commercial quantities of oil or gas, BP said.
Some $850 million of the writedown will be taken as anon-operating item because the well was part of a $7 billionacquisition of a package of assets from Devon Energy in2010.
The Brazilian part of that package was valued at the time at$3.2 billion. The remaining $230 million of the writedown -which relates to exploration costs - will be taken as anoperating item. BP will relinquish the block.
