Gulf of Mexico oil and gas news
Petroleum companies looking for oil and gas investment and development opportunities in the Gulf of Mexico are heading into deeper waters. A report issued by the Interior Department’s Minerals Management Service said production projects in water deeper than 1000 feet rose 8 percent last year to 141.
One thousand feet is considered “deepwater,” and 5000 feet is considered “ultra-deepwater.” One third of deepwater petroleum discoveries in 2008 were in ultra-deepwater with the deepest find at almost 10,000 feet. Deepwater drilling began in the Gulf of Mexico in 1979, but projects were relatively rare before taking off in the 1990s.
President of Shell Oil, Marvin Odum, says deepwater development is based on the quickly shrinking areas to explore for petroleum development, and just as importantly new oil and gas technology makes it easier to find potential fields in the deeper water.
The Minerals Management Service cut its forecast for the oil and gas output of the Gulf of Mexico for the next ten years by 300,000 barrels per day to between 1.6 million and 1.9 million barrels. The service also sees natural gas trending down after a rise to over 7 billion cubic feet per day this year.
Part of the forecast cutback is tied to the increase in deepwater projects. Although technology is allowing for deeper exploration and development, deepwater projects have increased technical and geological challenges than offshore in more shallow waters. These challenges lead to longer lead times for the projects.
The Minerals Management Service added the recession could still affect oil and gas investment and development. Gulf region director Lars Herbst said, “We could start seeing deepwater exploration and development affected if it’s a long downturn.”
The Gulf of Mexico has accounted for as much as 25 percent of U.S. domestic oil production and 15 percent of domestic gas production.
Sources for this post include Google News and Reuters UK.
Published Tuesday, May 26th, 2009 at 4:57 am and filed under Industry News.