Deepwater Exploration in GOM Expanding, Says MMS

Exploration in the Gulf of Mexico is going farther and deeper in its quest for more oil and natural gas, and the efforts are paying off, according to a new report by the Minerals Management Service (MMS). By the end of 2004, gas production from the deepwater Gulf of Mexico (GOM) grew to 3.9 Bcf/d, while oil output reached 922,000 bbl/d.

The report, "Deepwater Gulf of Mexico 2005: Interim Report of 2004 Highlights," was unveiled in Houston at the Offshore Technology Conference by MMS Director Chris Oynes. It updates a biennial report of oil and natural gas industry activities in water at least 1,000 feet deep in the GOM over the past 13 years and in particular, 2004.

"The deepwater Gulf of Mexico continues to be an expanding frontier with many new discoveries and new geologic plays," said Oynes. In the past year, Oynes noted that there were several significant accomplishments and trends.

As of March, 107 projects were on production in deepwater, and deepwater oil production accounted for about 64% of the all of GOM's oil output. Last year three additional deepwater discoveries were made in the GOM, bringing to 15 the total number discovered in the region last year. Twelve were drilled in water depths of 5,000 feet or more.

In the past four years, MMS noted that 18 discoveries have been announced in water deeper than 7,000 feet, and a record 16 exploratory wells were drilled in water more than 7,500 feet deep.

A record four spars were installed last year, including the world's largest spar at Holstein in Green Canyon Block 644 and the first cell spar at Red Hawk in Garden Banks Block 877. Also, the deepest tension-leg platform in the world, Magnolia, in Garden Banks Block 783 in 4,674 feet of water.

In another industry first, Oynes pointed to the Atwater Valley Producers Group, a consortium made up of several independent exploration and production companies that was formed last year (see Daily GPI, dec. 16, 2004). The consortium is developing multiple ultra-deepwater discoveries in the untapped Eastern GOM through its Independence Hub, a natural gas facility that is expected to ramp up in 2007. The project will involve subsea well production from eight projects to a facility located in the Central Gulf Planning Area.

According to MMS, subsea production has expanded from a water depth of 1,462 feet with Placid Oil Co.'s Green Canyon Block 29 project in 1988, to 5,318 feet with Shell's Mensa in 1997, and to 7,591 ft with Shell's Coulomb/Na Kika project in 2004. The Na Kika production facility now supports six subsea tieback projects: East Anstey, Fourier, Herschel, Ariel, Coulomb, and Kepler.

To obtain a free copy of the report on deepwater GOM activity, contact MMS and ask for OCS Report MMS 2005-023. The entire report also may be downloaded on the MMS website. (Copyright 2005 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

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