WoodMac: Deepwater Gulf of Mexico E&P to surge in 2013

Wood Mackenzie Ltd. anticipates a strong medium- to long-term resurgence of exploration and production activity for the deepwater Gulf of Mexico following the 2010 Macondo well blowout and resulting massive oil spill offshore Louisiana, which stalled gulf activities for a while.

Gulf production is expected to reach 2 million boe/d in 2018-19, analysts said during an Oct. 3 media briefing at the WoodMac office in Houston.

The Macondo incident and resulting more-stringent US drilling regulations delayed some E&P plans. But WoodMac’s analysts emphasized the gulf is being defined by high investments, a wide range of opportunities, and the large number of companies. Currently 46 operators work in the gulf in more than 400 m of water.

Analysts said the gulf still represents one of the most attractive E&P regions worldwide despite changing US drilling and environmental regulations that pose some uncertainties for oil and gas companies.

“The moratorium and exodus of several mobile offshore drilling units from deepwater gulf in 2010 sharply hindered drilling activity through 2011, but it has rebounded very well in 2012,” said Lauren Payne, WoodMac gulf analyst for upstream research. “We expect this trend to continue, driven primarily by development drilling as operators seek to boost production levels and bring new projects on stream,” she said.

WoodMac forecast that more than $20 billion will be spent drilling development wells alone through 2015. Subsea spending will grow as new projects like Jack-St. Malo development and Hadrian move forward. Together, drilling and subsea spending are estimated at $27 billion through 2015.

Chevron is the operator of the Jack-St. Malo development and has a 50% interest in Jack (Walker Ridge Blocks 714, 715, 758, 759, and a portion of Blocks 802 and 803) and a 51% interest in St. Malo (Walker Ridge Blocks 673, 674, 677, and 678).

Production is expected to start in 2014, and the Lower Tertiary reservoir is in 26,500 ft of water. The combined fields may contain more than 500 million bbl of potentially recoverable oil (OGJ Online, Sept. 7, 2010).

Julie Wiilson, WoodMac senior analyst for exploration service, expects more than $70 billion will be spent on exploration in the deepwater gulf during 2013-30, which would be more than WoodMac anticipates for all the other key deepwater provinces worldwide combined.

“Opportunities in this region range from small, low-risk prospects to giant targets in extreme conditions,” Wilson said. “Abundant infrastructure and an open, competitive environment allow smaller companies to create value from the more mature plays. Larger companies exploring for giant volumes must contend with remote, ultradeep waters, and reservoirs that are buried to extreme depths below thick salt layers that impede seismic imaging.”

Ample processing capacity

Ample unused processing capacity in the deepwater gulf could create significant value for hub owners and satellite operators alike, if the right terms can be agreed upon.

“By 2017, up to 70% of deepwater gulf processing capacity will remain unused, although the available amount will be smaller due to technical and operational reasons,” said Norm Pokutylowicz, WoodMac analyst for upstream research.

“Demand for it will come in the form of infill development and tiebacks, while value will be derived either by operators monetizing their discovered resources or in the form of tariffs from third-party tie-backs,” Pokutylowicz said.

WoodMac forecast an additional 2 billion boe will be produced by subsea tiebacks from fields under development, probable developments, and those yet to be discovered by 2017. By then, new third-party tiebacks are also expected to generate each year an extra $200 million in tariffs.

Potential obstacles to gulf activities include capital, equipment, and personnel constraints in the gulf and worldwide that could affect project prioritization.

“The recent lack of exploration drilling will impact long-term reserves replacement,” Payne said. “In addition, the high-profile Paleogene play still faces substantial technological risks, in an ultradeepwater environment with very poor reservoir qualities. That being said, we are well on our way to achieving this new equilibrium in the gulf in 2013 and the future of the gulf from there is very bright,” she said.

Contact Paula Dittrick at paulad@ogjonline.com.

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

BHI: US oil rig count rises for first time in 30 weeks

07/02/2015 A sudden 12-unit jump in oil-directed rigs during the abbreviated week ended July 2 represented their first rise since Dec. 5, 2014, and helped lif...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

Shell makes FID on Appomattox deepwater development in Gulf of Mexico

07/01/2015 Royal Dutch Shell PLC has taken a final investment decision (FID) on the Appomattox deepwater development, authorizing construction and installatio...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts


Driving Growth and Efficiency with Deep Insights into Operational Data

When Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST



On Demand

OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST


Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected