Drilling in the Gulf of Mexico is Rebounding, Operators Put the Hammer Down

bp thunderhorse
BP’s Thunder Horse semisubmersible production and drilling platform is moored in Mississippi Canyon in about 6,000 feet of water. It is the largest production semi-submersible in the world and capable of producing up to 250,000 barrels of oil and 200 million cubic feet of natural gas per day.

HOUSTON–The U.S. Gulf of Mexico is on track to surpass by 2019 the peak production levels last seen before the 2010 Deepwater Horizon disaster, analysts at energy consulting firm Wood Mackenzie said Wednesday.

With operators working full time to expand oil and gas production, Wood Mackenzie expects commercial deepwater production in the gulf will reach 2 million barrels of oil equivalent a day by 2019.

Before the Deepwater Horizon disaster, deepwater production in the Gulf peaked at 1.8 million barrels of oil equivalent a day, but is currently about 1.4 million barrels of oil equivalent per day, said Wood Mackenzie analyst Lauren Payne.

Ms. Payne said drilling in the Gulf is rebounding.

“We expect this trend to continue, driven primiarly by development drilling as operators seek to boost production levels and bring new projects onstream,” she said.

Wood Mackenzie projections estimate that through 2015, companies will spend $20 billion drilling development wells for projects already onstream.

Despite more stringent regulations and a more time-consuming permitting process for wells in the gulf, the area’s infrastructure and relatively risk-free environment above ground has attracted both small and large operators to the region, said Julie Wilson, senior analyst for exploration.

Wood Mackenzie’s projections don’t include potential oil discoveries offshore.

Ms. Wilson said she expects 12 billion barrels of oil equivalent to be discovered by 2013, the fruits of $70 billion in investments she anticipates comapnies making on gulf exploration.

– Alison Sider, (c) 2012 Dow Jones & Company