Your web browser is out of date. Update your browser for more security,
speed and the best experience on this site.
You have successfully subscribed to the newsletter!
12 11, 2012 by Platts
The deepwater Gulf of Mexico could be the strongest offshore market in the world through mid-decade with more than 60 rigs working there by 2017, up from the mid-30s today, despite being one of the world's most mature hydrocarbon basins, according to a long-time US Gulf analyst.
"After essentially being left for dead following the devastating Macondo blowout ... the deepwater Gulf of Mexico is in the early stages of an extended growth cycle and is poised to be the strongest offshore market in the world through 2015," International Strategy and Investment's Jud Bailey said in an analysis released late Monday.
Further exploration and also development of discoveries such as Anadarko Petroleum-operated Lucius, ExxonMobil-operated Hadrian, Chevron-operated Big Foot and Jack/St Malo and BP-operated Tiber and Kaskida should fuel that growth, Bailey said.
In April 2010, the BP-operated Macondo well blew out, causing Transocean's semisubmersible Deepwater Horizon rig to explode and sink, leading to the largest marine oil spill in US history. The accident caused the deaths of 11 men aboard the rig, and led to a federally mandated nine-month ban on deepwater drilling while the US government formulated and then implemented stricter safety standards. The temporary ban on deepwater drilling was lifted in February 2011, with issuance of the first post-Macondo drilling permit.
The Gulf remains a source of "significant" growth potential for large integrated oil companies, large independents, and also oil service, capital equipment and rig companies, Bailey said.
"While an increase in deepwater drilling activity is widely expected in the Gulf of Mexico, the magnitude of the increase is under-appreciated as well as the revenue and profit potential for [oilfield] service companies due to the higher concentration of ultra-deep and highly service-intensive wells to be drilled in the Lower Tertiary and Miocene trends," which are large plays located respectively in the southwest and central US Gulf, said Bailey.
Based on ISI Group's evaluation of discoveries and future drilling plans by the majority of operators in the area, the brokerage predicts the deepwater rig count in the US Gulf will grow from about 36 floating rigs currently to roughly 50 such rigs by mid-2014 and 60 or more by 2015-2017, said Bailey. That should be fueled by development and further appraisal of "multiple" Lower Tertiary and Miocene finds in the last five years, he said.
"In fact, we forecast the balance between exploration and development wells drilled in the deepwater Gulf of Mexico to return to roughly 50/50 for the first time since the early 2000s, which implies almost three times the annual development activity as the peak of the last deepwater cycle in 2006-2008," said Bailey.
While the analyst foresees exploration activity to "only modestly" outpace levels found during the last cycle, the "primary catalyst" for growth in the deepwater US Gulf should be the "significant" ramp up in development activity, "which we forecast to increase to roughly 70 wells per year," he added.
Moreover, Bailey predicted the number of deepwater exploration wells drilled in the region would rise to about 60-70/year over the next three years. That is "modestly" higher than the number drilled each year from 2002-2008 but a "significant step-up" from under 30/year in 2010-2011, he said.
Oct 14, 2020 | LMOGA
Sep 24, 2020 | LMOGA
Sep 23, 2020 | LMOGA
Sep 09, 2020 | LMOGA + API