Baker Institute: Drilling in gulf evolves after Macondo spill

Paula Dittrick
OGJ Senior Staff Writer

HOUSTON, Feb. 11 -- Future oil and gas production from the deepwater and ultradeepwater Gulf of Mexico hinges on how US drilling policy and safety standards evolve following the April 2010 Macondo well blowout and subsequent oil spill, speakers said Feb. 11 at Rice University’s Baker Institute.

“In 2010, the US Gulf of Mexico is expected to produce a combined 1.7 million b/d of oil and 6 bcfd of natural gas, equivalent to 23% of US oil and 10% of gas output,” said J. Robinson West, PFC Energy chairman and chief executive officer.

He was among speakers at a Baker Institute day-long conference entitled “US Offshore Oil Exploration: Managing Risks to Move Forward.” Industry spokesmen, scientists, and government officials attended the conference to discuss how to improve the safety and effectiveness of offshore drilling.

“If oil and gas drilling are able to continue without constraint in the gulf, it is the young fields in ultradeep water that will make the greatest contribution to US domestic oil production and energy security,” West said.

“By 2020, over 50% of the gulf’s production is projected to come from ultradeep waters, which can produce 12.9 billion boe, or 45% of the gulf’s total projected output over the decade from 2011 to 2020,” West said of PFC Energy projections.

PFC made its forecast before the Macondo blowout so the numbers exclude reduced production rates stemming from a deepwater drilling moratorium imposed shortly after the explosion and fire to Transocean Ltd.’s Deepwater Horizon semisubmersible. BP PLC operated Macondo.

The forecast had projected 100 ultradeepwater wells to be drilled by 2020, but West said he believes that number is more likely to be 65-75 wells.

“The deepwater industry is global and will take its capital, equipment and jobs to other basins if it cannot operate in the US,” West said.

A Chevron Corp. executive attending the Rice University event believes industry and federal drilling regulators are nearing the end of the process to enable the Bureau of Ocean Energy Management, Regulation, and Enforcement to restart issuing deepwater drilling permits.

Gary Luquette, president of Chevron North America Exploration & Production, said he believes Chevron is “days away” from complying with all BOEMRE requirements issued since the Macondo blowout and oil spill (OGJ Online, Feb. 10, 2011).

The BOEMRE has waited for industry to demonstrate its well control and subsea containment capabilities before resuming deepwater drilling permits.

Michael Bromwich, BOEMRE director, said in Washington, DC, earlier this week that he expects permitting for deepwater projects to resume before midyear. Bromwich also was expected to speak at the Baker Institute event.

Contact Paula Dittrick at paulad@ogjonline.com.

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