Gulf of Mexico oil output expected to soar
By KRISTEN HAYSCopyright 2007 Houston Chronicle
Action in the Gulf of Mexico's deep waters is growing so much that oil production could grow by more than 50 percent in the next decade, the federal agency that oversees oil and gas activity off the nation's coastlines reported today.
"With the continued interest and activity in the deepwater area of the Gulf, we anticipate that oil and gas production will continue to be strong with a large portion of the production coming from the projects in deeper water depths," Lars Herbst, acting regional director of the Gulf for the Minerals Management Service, said at the Offshore Technology Conference in Houston.
The service is an agency of the U.S. Interior Department.
Gulf oil production now stands at 1.35 million to 1.4 million barrels a day.
Through 2016, total Gulf oil production is expected to surpass 1.7 million barrels a day with existing shallow and deepwater operator commitments. Production could reach 2.1 million barrels if industry-announced discoveries and undiscovered resources reach their full potential, Herbst said.
The forecast assumes a string of new platforms begin production as planned.
Those include Thunder Horse, a BP-run platform that has been plagued by equipment and operational delays. Originally slated to begin production in 2005, Thunder Horse is slated to go on line next year, pumping 250,000 barrels a day of oil — the most of any Gulf platform.
Other projects included in the forecast include BP's Atlantis platform, which will be the second-largest in the Gulf with production capacity of 200,000 barrels a day. Atlantis' original start-up date of this summer was pushed to year-end.
And Chevron Corp. aims to place its Tahiti platform in the Gulf this summer, with an eye toward beginning production of 125,000 barrels a day next year.
Projects in depths exceeding 1,000 feet are defined as deepwater operations. The Tahiti, Atlantis and Thunder Horse projects sit in 4,000 feet of water or more.
Herbst said they and other projects illustrate growing interest in the Gulf's deep waters.
More than half of the 7,855 active oil and gas leases in the Gulf are in depths exceeding 1,000 feet. Last year 70 percent of the Gulf's oil came from those leases, Herbst said.
From 2005 to 2006, the number of tracts that attracted bids from companies for oil and gas leases in depths ranging from 1,500 feet to 4,999 feet rose 32 percent, Herbst said. Bids for leases on tracts in depths ranging from 5,000 feet to nearly 7,500 feet rose by 20 percent.
"There's solid evidence in both leasing and exploration activities to confirm the oil and gas industry's continued interest and motivation to explore and develop the deepwater frontier," he said.
On Monday the Interior Department rolled out a final proposed five-year plan to open tracts in previously off-limits areas for lease bids in the Gulf as well as along the entire coast of Alaska and part of the coast of Virginia. The Gulf areas are off Alabama and the western portion of the Florida panhandle.
Congress has two months to review the proposal.
Chevron Corp. noted that some of that new Gulf acreage is in ultra-deep water, defined as 6,000 feet more than 100 miles from shore.
"Any exploration in these frontier areas will be costly and very risky," the company said. "It will be years before the true potential in this deepwater area is finally known."
By KRISTEN HAYSCopyright 2007 Houston Chronicle
Action in the Gulf of Mexico's deep waters is growing so much that oil production could grow by more than 50 percent in the next decade, the federal agency that oversees oil and gas activity off the nation's coastlines reported today.
"With the continued interest and activity in the deepwater area of the Gulf, we anticipate that oil and gas production will continue to be strong with a large portion of the production coming from the projects in deeper water depths," Lars Herbst, acting regional director of the Gulf for the Minerals Management Service, said at the Offshore Technology Conference in Houston.
The service is an agency of the U.S. Interior Department.
Gulf oil production now stands at 1.35 million to 1.4 million barrels a day.
Through 2016, total Gulf oil production is expected to surpass 1.7 million barrels a day with existing shallow and deepwater operator commitments. Production could reach 2.1 million barrels if industry-announced discoveries and undiscovered resources reach their full potential, Herbst said.
The forecast assumes a string of new platforms begin production as planned.
Those include Thunder Horse, a BP-run platform that has been plagued by equipment and operational delays. Originally slated to begin production in 2005, Thunder Horse is slated to go on line next year, pumping 250,000 barrels a day of oil — the most of any Gulf platform.
Other projects included in the forecast include BP's Atlantis platform, which will be the second-largest in the Gulf with production capacity of 200,000 barrels a day. Atlantis' original start-up date of this summer was pushed to year-end.
And Chevron Corp. aims to place its Tahiti platform in the Gulf this summer, with an eye toward beginning production of 125,000 barrels a day next year.
Projects in depths exceeding 1,000 feet are defined as deepwater operations. The Tahiti, Atlantis and Thunder Horse projects sit in 4,000 feet of water or more.
Herbst said they and other projects illustrate growing interest in the Gulf's deep waters.
More than half of the 7,855 active oil and gas leases in the Gulf are in depths exceeding 1,000 feet. Last year 70 percent of the Gulf's oil came from those leases, Herbst said.
From 2005 to 2006, the number of tracts that attracted bids from companies for oil and gas leases in depths ranging from 1,500 feet to 4,999 feet rose 32 percent, Herbst said. Bids for leases on tracts in depths ranging from 5,000 feet to nearly 7,500 feet rose by 20 percent.
"There's solid evidence in both leasing and exploration activities to confirm the oil and gas industry's continued interest and motivation to explore and develop the deepwater frontier," he said.
On Monday the Interior Department rolled out a final proposed five-year plan to open tracts in previously off-limits areas for lease bids in the Gulf as well as along the entire coast of Alaska and part of the coast of Virginia. The Gulf areas are off Alabama and the western portion of the Florida panhandle.
Congress has two months to review the proposal.
Chevron Corp. noted that some of that new Gulf acreage is in ultra-deep water, defined as 6,000 feet more than 100 miles from shore.
"Any exploration in these frontier areas will be costly and very risky," the company said. "It will be years before the true potential in this deepwater area is finally known."
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