US Gulf Set for Record 2020 With Oil Production
The U.S. Gulf of Mexico is positioned for another year of record oil production in 2020, according to Norway-based energy research firm Rystad Energy.
Deepwater projects will anchor the supply growth.
The Gulf of Mexico’s oil production has risen every year since 2013, with an average of 104,000 barrels per day annually.
“2020 is expected to be another record year with average production above 1.9 million barrels per day,” said Joachim Milling Gregersen, an analyst on Rystad’s upstream team.
So far in 2019, the top contributors to supply growth have been the Big Foot and Crosby fields, but the Appomattox field is expected to make a significant impact by the end of the year by ramping up towards its processing capacity of 175,000 barrels of oil equivalent per day.
Strong production growth in the Gulf comes after many years of cost-cutting. Whereas total investments peaked at $30.2 billion in 2014, they currently stand at less than half that in 2019 and is expected to grow to $17.7 billion by 2022.
“Downscaled developments have driven down costs in the Gulf of Mexico,” Gregersen said. “As cost-cutting has been essential for maintaining positive free cash flow in the low oil-price environment, we see that most of the cuts have been made on the development side. This has been done in part through downscaling of projects and a preference towards sanctioning tie-backs for the time being. Utilizing available topside capacity through field expansions and phased development has a positive impact on operational expenditures.”
The Gulf of Mexico has globally been the second most prospective offshore region, in terms of discoveries since 2015. It trails only Guyana.
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