EIA, IEA sharpen views of lost gulf output

July 14, 2010
Estimates of oil production declines resulting from the moratorium on deepwater drilling in the US, imposed in response to the Apr. 20 blowout of the Macondo well and consequent spill in the Gulf of Mexico, are beginning to come into focus.

By OGJ editors
HOUSTON, July 14
-- Estimates of oil production declines resulting from the moratorium on deepwater drilling in the US, imposed in response to the Apr. 20 blowout of the Macondo well and consequent spill in the Gulf of Mexico, are beginning to come into focus.

In its July Short Term Energy Outlook, the US Energy Information Administration estimated production declines resulting from the moratorium at 31,000 b/d in the fourth quarter this year and 82,000 b/d in all of 2011. It says the deficit will start at about 10,000 b/d in September and reach 100,000 b/d by December.

Those estimates represent increases from EIA’s numbers a month earlier of 26,000 b/d in the fourth quarter and 70,000 b/d in 2011.

EIA forecasts US crude production of 5.37 million b/d this year, down 26,000 b/d from 2009. It sees an increase in total liquids supply—including crude, condensate, gas plant liquids, biofuels, other liquids, and refinery processing gains—to 9.35 million b/d this year from 9.05 million b/d last year.

The International Energy Agency’s July Oil Market Report, meanwhile, said delays to new projects in the gulf “have already shaved 30,000 b/d off both 2010 and 2011 US crude production.”

Both agencies emphasized the uncertainty of forecasting production while regulatory steps and responses remain unclear.

IEA said it wouldn’t cut its US production forecast further “until more clarity prevails” over regulations and duration of the moratorium.

“But extended project delays, if they occur, could reduce our 2015 projection for US gulf production by 100,000-300,000 b/d,” IEA said.

IEA projects an increase in US production of crude, condensate, NGL, and oil from nonconventional sources this year to 8.24 million b/d from 8.07 million b/d in 2009.