Posted on 05/03/2007 6:14:45 AM PDT by thackney
Oil production could grow by more than 50 percent in the Gulf of Mexico over the next decade if the industry keeps digging deeper to tap resources, the federal agency that oversees oil and gas activity off the nation's coastlines said Tuesday.
"With the continued interest and activity in the deep- water 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 Interior Department.
Gulf oil production now stands at 1.35 million to 1.4 million barrels a day. Natural gas production is 8 billion cubic feet per day.
Through 2016, total Gulf oil production is expected to surpass 1.7 million barrels a day with existing shallow and deep-water 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 beginning production as planned.
Those include Thunder Horse, a BP-run platform that has been plagued by equipment and operational delays. Originally scheduled to begin production in 2005, Thunder Horse is scheduled to go on line next year, pumping 250,000 barrels of oil a day, 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 startup date this summer was pushed to year-end.
4,000 feet or more 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 deep-water operations. The Tahiti, Atlantis and Thunder Horse projects sit in 4,000 feet of water or more.
Herbst said natural gas production could increase to 9 billion cubic feet per day or more, largely because of the Independence Hub floating platform, slated to go on line later this year.
James Lytal, executive vice president of Enterprise Products Partners in Houston, told an audience at the conference Tuesday that the Independence Hub is moored in 8,000 feet of water — the deepest to date of any Gulf platform.
Lytal said the platform, operated by Anadarko Petroleum Corp., links a string of deep- water natural gas fields owned by several companies, including Devon Energy and Dominion Exploration and Production.
Share the risk "Producers are looking for people to share reserve risk with them," Lytal said, so the companies struck agreements to produce gas from the fields to the single platform 150 miles south of Venice, La.
Each field didn't necessarily merit its own platform, but together, Independence has production capacity of 1 billion cubic feet per day.
Enterprise owns 80 percent of the platform, while Helix Energy Solutions Group owns the rest. An Enterprise affiliate also owns the 134-mile pipeline, known as the Independence Trail, that will transport the gas. Lytal said the platform is undergoing final testing, with the first flows expected some time this summer.
Herbst said such projects illustrate the growing interest in the Gulf's deep waters.
'Deep-water frontier' 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 deep-water 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 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 deep-water area is finally known."
If we don’t drill it, someone else will, especially off the Florida coastline.
Of course refining capacity will continue to remain flat, insuring high gas prices for the next 30 yrs.
We should drill offshore, as a Floridian I have my emails ignored regularly by my two Senatorial representatives, Tweedledum Nelson and Tweedledee Martinez
I think refining capacity will creep upwards, at existing refineries for the most part. Koch Flint Hills at Pine Bend and Marathon-Ashland at Robinson are typical.
Our politicians (dems and tourism republicans) will figure out a way to blame Bush when drilling platforms with the Chinese and Cuban flags appear just outside our southeastern territorial waters.
Sounds like they might want to start development of a real-life Deepcore platform.
It was announced this morning that Husky Oil bought Valero’s Lima, Ohio refinery. Lima runs 165,000 bbls of crude/day. You can bet the Canadians have a plan to pound this place with syncrude and they won’t setle for 165,000 for very long.
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