Interior policy change aims to increase US offshore production
The US Department of the Interior (DOI) is implementing a policy change that is expected to increase production from the US Gulf of Mexico by about 10%.
Under the updated rules, companies drilling offshore US will be able to drill from multiple reservoirs at higher pressure levels. The change is the result of “extensive technical consultation with offshore industry leaders,” DOI said in a release Apr. 24, and could increase production output by about 10%, “which would translate into over 100,000 barrels per day production increase over the next 10 years.”
The change follows President Donald Trump’s Jan. 20 executive order aimed at increasing American energy, after which the Bureau of Safety and Environmental Enforcement (BSEE) implemented new parameters for downhole commingling in the Paleogene (Wilcox) reservoirs, expanding the allowable pressure differential to 1,500 psi from 200 psi.
DOI said results from a 2023 University of Texas study “show that commingled production maximizes per-well oil production compared to sequential schemes. Over 30 years, it provides 61% more oil recovery, and over 50 years, it yields 21% more.”
In the release, DOI said the policy shift “is grounded in modern reservoir performance analysis and updates outdated guidance based on a 2010 government study. Under the updated rules, operators can now safely produce from multiple reservoirs with greater pressure differences, provided they meet new conditions including fluid compatibility certification, pressure monitoring and regular performance reporting to BSEE.”
National Ocean Industries Association president Erik Milito issued public support for the new parameters.
"NOIA strongly supports the Department of the Interior’s new commingling policy for the Gulf of America. This update reflects the latest science and the incredible expertise our industry brings to the table. It’s designed to unlock potentially stranded offshore oil and gas production while keeping safety and environmental protection front and center," Milito said in an Apr. 24 release.
DOI said the policy will not only increase production, but “enhance resource conservation” by expediting development from each reservoir and delivering more oil from existing operations.
The news comes following another DOI initiative announced Apr. 23. The agency said it will implement emergency permitting procedures to "strengthen domestic energy supply."
In response to President Trump’s declaration of a National Energy Emergency, DOI said the permitting procedure changes "are designed to expedite the review and approval, if appropriate, of projects related to the identification, leasing, siting, production, transportation, refining, or generation of energy within the United States." According to the release, the new permitting procedures "will take a multi-year process down to just 28 days at most."
