At a time when many operators are slowing down, activity in the Gulf of Mexico is moving full steam ahead, seemingly unfazed by a saturated oil market and poised to keep producing.
Despite the steep decent of oil prices that have frazzled the oil and gas industry since last summer, good news is coming from the Gulf of Mexico.
The U.S. Energy Information Administration (EIA) is projecting that production in the Gulf is on the rise – estimated to reach 1.52 million barrels per day this year and 1.61 million barrels per day in 2016. If projections are correct, production in the Gulf of Mexico will account for 16 and 17 percent of the total crude oil production in the country over the next two respective years.
ANTICIPATED DEEPWATER GULF OF MEXICO PROJECTS (2015-2016) Source: Energy Information Administration (EIA)
Unlike onshore drilling, which is associated with shorter timelines and is more susceptible to fluctuating oil prices, deepwater projects require longer timeframes as they move from discovery to production, said John Staub, the team lead for exploration and production analysis at EIA, to Rigzone.
“Deepwater projects are typically much larger than onshore projects. Their timeframes are longer and investments are larger. So when we are dealing with short-term price drops like those we are seeing now, one would not expect them to have a significant impact on decisions about whether or not to move forward on the development of these projects,” Staub said.
Although the 2010 Deepwater Horizon incident, which prompted a roughly 6-month drilling moratorium in the Gulf of Mexico’s Outer Continental Shelf (OCS), occurred approximately five years ago, its effects have been lasting – slowing production rates until last year.
The latest surge in oil and gas production is largely attributed to the revival of older projects that were once on hold and to new projects coming on line, some from partnerships that have made them economically possible, according to the EIA.
View Full Article
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
More from this Author
Most Popular Articles
From the Career Center
Jobs that may interest you