MMS forecasts higher Gulf of Mexico oil, gas output
Production incentives could help push Gulf of Mexico oil production to 2.5 million b/d by 2011—with almost 80% coming from deepwater wells—from the current 1.5 million b/d, US Department of the Interior and Minerals Management Service officials said Nov. 15.
The gulf's natural gas production is expected to decline initially from its current 12 bcfd to just over 11 bcfd as old fields are depleted before starting to rebound in 2008 and reaching 13 bcfd in 2011, MMS said in its first 10-year Gulf of Mexico forecast (see figure).
"This represents a significant share of our future energy supply," said Rebecca Watson, assistant Interior secretary for land and minerals management. "The Gulf of Mexico delivers more total energy to the United States than any other single domestic or foreign source."
The forecast did not assume any range of prices but was based on companies' current discoveries that are not on line and historical trends in the gulf, a DOI spokesman told OGJ following the briefing. It also excludes areas currently under moratoria.
Producers are responding already to White House incentives, including those announced in January that offer royalty relief for gas produced from formations under shallow water that otherwise would be too costly and financially risky to attempt, according to Watson. The administration of President George W. Bush identified these incentives last year as the single best step to increase domestic gas production, she said.
Oil production growth in the gulf will come from the deep water, which is in its ninth year of sustained expansion, as several major projects come online, observed MMS Gulf of Mexico Regional Director Chris Oynes. Operators announced 13 deepwater discoveries in 2003 and have announced 10 more so far this year, he said (see table).
"The deepwater regions of the gulf may contain about 56 billion bbl of oil equivalent resources yet to be found," Oynes said. MMS expects a substantial amount of deepwater oil production to have associated gas, he added.
The forecast is available in a new MMS publication, Gulf of Mexico Oil and Gas Production Forecast: 2004-13 (MMS OCS Report 2004-065).
