Gulf Oil Production to Set Records Through 2020

Gulf Oil Production to Set Records Through 2020
Annual oil production in the Gulf of Mexico is expected to jump to 1.9 million bpd in 2019.

Oil production in the Gulf of Mexico (GOM) hit a new annual record of about 1.8 million barrels per day (bpd) in 2018, and the U.S. Energy Information Administration (EIA) anticipates additional production records in 2019 and in 2020 from the region. This is despite the shut-ins tied to Hurricane Barry in July and includes adjustments for hurricane-related shut-ins for the rest of this year and 2020.

Annual oil production in the GOM is expected to jump to 1.9 million bpd in 2019 and reach 2 million bpd the following year, the agency reported. Despite the growth projections, GOM crude oil production will account for a smaller portion—just 15 percent—of the total in the U.S. This figure was 23 percent back in 2011, but since then onshore production growth has been outpacing offshore.

Eight new deepwater projects are expected to come online this year while four should come online in 2020. Majority operators for the 2019 starts include LLOG, Shell, Oxy, Murphy Oil and W&T Offshore. Talos Energy, BP, Murphy Oil and Fieldwood Energy are majority operators for the 2020 starts.

The agency expects these projects in total to add around 44,000 bpd this year and approximately 190,000 bpd in 2020 as their production ramps up.

In 2019, oil production in the GOM slipped from 1.9 million bpd in June to 1.6 million bpd the following month because of Hurricane Barry-related platform evacuations. However, production recovered fairly quickly, as GOM oil production hit 2 million bpd in August 2019.

Oil price spikes in 2017 and 2018 (compared to the lows in 2015 and 2016) haven’t yet had a marked effect on operations in the GOM, but they have the potential to contribute to higher rig counts and field discoveries in the coming years, according to the EIA.

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