Some 2.5 billion barrels of discovered oil await development in the deepwater Gulf of Mexico. In a recent report, energy consulting firm Wood Mackenzie values these assets at $13.5 billion. The Scotland-based firm calculates average capex costs of $11.60 per barrel of oil equivalent (BOE) for on-the-bench oil.
That contrasts to 3.3 billion BOE contained in fields currently being developed, including Thunder Horse, Tahiti, Great White and Shenzi, and 3 billion BOE in producing fields.
The crop of probable developments reflects the industry’s move into deeper waters and deeper Lower Miocene and Lower Tertiary pays. All but one of the likely projects lie in the Central Gulf, and Walker Ridge and Green Canyon protraction areas are epicenters of recent discoveries.
The largest field in the probable category is Jack, in Walker Ridge 159, with estimated reserves of 375 million BOE. Knotty Head, in Green Canyon 512, and Pony, in GC 468, each contains reserves of 351 million BOE. St. Malo, in WR 678, holds 350 million BOE. These four fields account for more than half of the reserves in the probable category.
Fields larger than 200 million BOE will likely be developed as stand-alone projects, and smaller accumulations will use subsea tie-backs. In terms of reserves, the leading operator in these upcoming projects is Chevron Corp., followed by BP, Hess Corp. and Nexen Inc.
Not surprisingly, development times are extending and costs are rising in the deepwater GOM. From its 2007 list of probable developments, WoodMac forecasts peak production rates of more than 600,000 BOE per day will not be reached until 2017.
The extended period reflects the complex challenges the industry faces to bring massive Lower Tertiary fields onstream. The probable developments will cost nearly $2 per BOE more than projects already in development and more than $5 per BOE above fields already onstream.
Recommended Reading
Exclusive: Chevron Balancing Low Carbon Intensity, Global Oil, Gas Needs
2024-03-28 - Colin Parfitt, president of midstream at Chevron, discusses how the company continues to grow its traditional oil and gas business while focusing on growing its new energies production, in this Hart Energy Exclusive interview.
CERAWeek: Tecpetrol CEO Touts Argentina Conventional, Unconventional Potential
2024-03-28 - Tecpetrol CEO Ricardo Markous touted Argentina’s conventional and unconventional potential saying the country’s oil production would nearly double by 2030 while LNG exports would likely evolve over three phases.
Total CEO: US LNG Shaky, Global Projects Brought into Spotlight
2024-02-21 - U.S. President Joe Biden’s decision to pause approvals for new U.S. LNG projects benefits similar projects around the world and casts doubt around U.S. supply, TotalEnergies’ Pouyanné told analysts during the company’s quarterly webcast.
US Natgas Prices Hit 5-week High on Rising Feedgas to Freeport LNG, Output Drop
2024-04-10 - U.S. natural gas futures climbed to a five-week high on April 10 on an increase in feedgas to the Freeport LNG export plant and a drop in output as pipeline maintenance trapped gas in Texas.
Exclusive: Renewables Won't Promise Affordable Security without NatGas
2024-03-25 - Greg Ebel, president and CEO of midstream company Enbridge, says renewables needs backing from natural gas to create a "nice foundation" for affordable and sustainable industrial growth, in this Hart Energy Exclusive interview.