| Total Shut-in (Percentage of GOM Production) | ||
| Oil, BOPD Shut-in | 412,070 BOPD | 23.55% |
| Gas, MMCFD Shut-in | 494 MMCFD | 25.56% |
| Evacuations and rig movements | total | % of GOM |
| Platforms Evacuated | 130 | 35% |
| Rigs Evacuated (non DP) | 2 | 40% |
| DP Rigs Moved-off | 3 | 15% |
Archive for the ‘Gulf of Mexico’ Category
~1/4 of GoM Production shut-in by Hurricane Francine as of 12:30 pm ET on 9/10/2024
Posted in Gulf of Mexico, hurricanes, Offshore Energy - General, tagged evacuations, Gulf of Mexico, Hurricane Francine, production shut-in, rig movement on September 10, 2024| Leave a Comment »
Excellent JPT article on advances in deepwater technology
Posted in Gulf of Mexico, Guyana, Offshore Energy - General, well control incidents, tagged BSEE, Chevron, deepwater technology, Exxon, HPHT, JPT, Lars Herbst, research, well capping on September 6, 2024| Leave a Comment »
A new JPT article features comments from BOE contributor Lars Herbst on advances in HPHT technology, control systems, sensors and transmitters, and automation that are facilitating the next era of deepwater development.
Well capping technology, which provides a tertiary well control capability, is an essential element of post-Macondo exploration and development. Lars points to the importance of BSEE’s unannounced drill program to verify that capping stacks can be transported and installed in a timely manner. Chevron expresses pride in leading a team that deployed and installed a capping stack in 6,200 feet of water in a drill monitored by BSEE. During that drill, a remotely operated vehicle (ROV) closed 10 valves to shut in a simulated well.
Exxon’s Jayme Meier aptly characterizes the challenge and excitement of deepwater development:
“You are floating on a surface, and you have to be able to pinpoint exactly where you’re going to land subsea hardware, exactly where you’re going to moor an FPSO and hit target boxes that are a few feet by a few feet, and they’re 6,000 ft below you,” she said. “It is the most exciting thing that I’ve ever been involved in. And it involves technology, technical know-how, and an ability to really plan the base plan and the contingency plan.”
Advances in deepwater technology are indeed impressive, but continuous improvement must always be the objective. In that regard, Lars rightfully emphasizes the importance of sustaining research through the industry’s up and down cycles.
GoM oil production virtually unchanged for 5 consecutive months
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged BOEM forecast, Gulf of Mexico, leasing policy, Permian Basin, production on Federal lands on September 4, 2024| 5 Comments »
EIA has posted the June 2024 US production data. Gulf of Mexico production was remarkably flat from February through June, with a maximum deviation of only 2.0% (FEB vs. APR) and a deviation of only 0.5% from the beginning of this 5 month period to the end. Looking at the historical EIA data, this is about as stable of a 5 month period as I could find. Presumably, production from the new deepwater facilities is offsetting declines elsewhere as anticipated.
Unfortunately, the production growth forecasted by BOEM is not being realized. BOEM’s 2024 production forecast of 2.013 million bopd will likely be more than 200,000 bopd too high. Their forecast of >2 million bopd through 2027 is increasingly doubtful. These production forecasts contributed to (or were an excuse for) unprecedented leasing policies intended to prevent production from rising too high for too long.
Per ONRR data, the Gulf of Mexico continued to be the top oil producer for Federal lands in 2023. An additional 72.7 million bbls were produced on Native American lands. New Mexico, which has experienced significant Permian basin production growth, ranked second. The Texas Permian was the dominant US oil producer, but that production is almost exclusively on private lands (a big factor in the Permian success story).
| Location (Federal lands) | 2023 production (bbls) |
| Gulf of Mexico | 680,548,975 |
| New Mexico | 409,987,014 |
| Wyoming | 47,232,043 |
| North Dakota | 43,225,104 |
| Other | 33,635,796 |
Ruling by a Federal judge in Maryland jeopardizes the Gulf of Mexico oil and gas program. Could there be unintended consequences for the wind program?
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Offshore Wind, Regulation, tagged biological opinion, Gulf of Mexico, Inflation Reduction Act, Judge Deborah Boardman, lease sale 262, Nantucket Magazine, NOAA, Rice's whale, wind leasing on September 3, 2024| Leave a Comment »
In response to a lawsuit filed by the Sierra Club et al, a Federal judge in Maryland vacated a 2020 biological opinion by the National Marine Fisheries Service (part of NOAA) that addressed risks to endangered species, most notably Rice’s whale, from oil and gas operations in the Gulf of Mexico. The decision by Federal Judge Deborah Boardman, who was appointed to her position in 2021, is attached.
Judge Boardman’s ruling is effective on Dec. 20, 2024. After that date, no new GoM leases may be issued and no new operating plans may be approved pending a new biological opinion. Existing GoM operations could also be affected. In other words, the ruling could have unprecedented effects on the OCS oil and gas program. (If you wonder how a Maryland judge can issue a ruling that could have major consequences for Louisiana and Texas, it is presumably because NOAA’s headquarters office is in Silver Spring, MD.)
The biological opinion process will likely be lengthy given the political considerations in an election year and the prospects for related litigation.
The judge’s ruling could also affect wind leasing in a manner that was perhaps unforeseen. Offshore wind leasing, which the plaintiffs strongly support despite the risks to the critically endangered North Atlantic Right Whale, could be delayed. Per a provision in the “Inflation Reduction Act,” no offshore wind leases may be issued after 12/20/2024, the one year anniversary of the last oil and gas lease sale (no. 261). Ironically, this is the same date as the effective date of the judge’s ruling.
The judge’s decision will likely further delay the next oil and gas lease sale (no. 262) well into 2025 or later, and extend the pause in issuing wind leases that begins on 12/20/2024. Perhaps with that in mind, BOEM has been forging ahead with wind auctions despite the troubling Vineyard Wind blade failure, economic challenges for the wind industry, and growing opposition from coastal residents. An editorial by the publisher of Nantucket Magazine expresses concerns that should not be overlooked in the rush to auction wind leases.
(More on a new biological opinion related to the Right Whale in a future post.)
The 5 new deepwater GoM platforms are now (or will soon be) producing. What’s next?
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged Anchor, Argos, Beacon Offshore, bp, Chevron, deepwater production, Gulf of Mexico production, high pressure production, Kaskida, King's Quay, Murphy, Paleogene, Shell, Shenandoah, Sparta, Vito, Whale on August 21, 2024| Leave a Comment »
Four of the five simpler, safer, greener deepwater platforms featured on this blog are now producing. The 5th platform (Whale) is on location and scheduled to begin production later this year.
| platform | operator | first production |
| King’s Quay | Murphy | April 2022 |
| Vito | Shell | Feb 2023 |
| Argos | bp | April 2023 |
| Anchor | Chevron | Aug 2024 |
| Whale | Shell | late 2024 |
These platforms are in 4000 to 8600′ of water, are expected to reach peak production rates of 100-150,000 boe/day, and have favorable emissions characteristics on a per barrel basis.
This is all good, but what is next? Will technological advances once again sustain GoM production? The short answer appears to be yes!
The efficiencies achieved with the simpler platform designs combined with the high pressure (>15,000 psi) technology developed over the past 2 decades will facilitate production from the highly prospective Paleogene (Wilcox) deepwater fans. (For those interested in learning more about the geology, see the excellent presentation by Dr. Mike Sweet, Univ. of Texas, that is embedded below.)
Chevron’s Anchor is the first deepwater, high-pressure development. Three similar deepwater hub platforms (table below) will begin production over the next 5 years. These host platforms will also facilitate additional production from nearby fields. Each will have production capacities of approximately 100,000 boe/day. Note the long lead times in achieving first production given the technological issues that had to be evaluated and addressed.
| platform | operator | discovery date | first production |
| Kaskida | bp | 2006 | 2029 |
| Sparta | Shell | 2012 | 2028 |
| Shenandoah | Beacon | 2009 | 2025 |
Wood Mackenzie sees these high pressure projects as the key to sustaining GoM production rates. Their projections for 2024 and 2025 seem optimistic based on 2024 YTD data, which adds to the importance of the projected new production.
Under the Sea: deepwater development driving subsea expenditures higher
Posted in energy policy, Gulf of Mexico, Guyana, Offshore Energy - General, tagged expenditures growth, flowlines, risers, Rystad, subsea market, umbilicals on August 16, 2024| Leave a Comment »
Rystad Energy projects a 10% annual compound growth rate for the subsea market from 2024 to 2027, with total spending anticipated to exceed $42 billion by the end of this period.
Brazil dominates the subsea umbilical risers and flowlines (SURF) market. Unsurprisingly, the US is lagging given the absence of a robust offshore leasing program and the dearth of deepwater discoveries in recent years.
SCOTUS Chevron deference decision could factor large in the 5 Year Leasing Plan litigation
Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged 5 year leasing plan, API, Chevron Doctrine, DOI, litigation, offshore oil and gas on August 13, 2024| Leave a Comment »
API is challenging the Dept. of the Interior’s 5 year oil and gas leasing plan, which includes the fewest lease sales in program history. That challenge was filed on 12 February, 60 days after Secretary Haaland approved the 5 plan and the first day appeals could be filed pursuant to 43 U.S. Code § 1349.
18 weeks after the API suit was filed, the Supreme Court overturned the Chevron Doctrine. That doctrine (described above) instructed judges to defer to agency interpretations when the language in a law was unclear.
Interior’s 5 year OCS oil and gas leasing plan provides for the fewest (3) lease sales in history and may not have included a single sale were it not for legislation prohibiting the issuance of offshore wind leases unless an offshore oil and gas lease sale was held during the prior year.
This unprecedented oil and leasing decision was based on “the need to confront the climate crisis through reducing greenhouse gas emissions” and on achieving “net zero pathways.” Neither of those objectives is articulated in the OCS Lands Act or other governing legislation.
Extending the Secretary’s general safety and environmental authority for OCS operations to include global climate considerations is a stretch and the type of interpretive administrative decision that the Supreme Court struck down.
Riser leak in TX State waters has been patched
Posted in decommissioning, Gulf of Mexico, Offshore Energy - General, oil spill response, pipelines, tagged abandoned platform, decommissioning, gas condensate leak, High Island, pipeline riser, Texas GLO on August 7, 2024| Leave a Comment »
According to the Texas General Lands Office, which provided the above photos, a patch has been applied to the leaking pipeline riser on an abandoned platform in High Island Block 98-L. The gas condensate spray has been stopped.
Crews from the U.S. Coast Guard, Texas General Land Office, and the Texas Railroad Commission monitored the operation. It’s unclear who the responsible party is and who funded and performed the work.
May GoM production dips further. Two million bopd fading in the rear view mirror.
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged deepwater discoveries, deepwater exploration, drilling decline, Gulf of Mexico production on August 1, 2024| 1 Comment »
May Gulf of Mexico production fell 55,000 bopd from April. BOEM’s 2024 production forecast of 2.013 million bopd will likely be more than 200,000 bopd too high. Their forecast of >2 million bopd through 2027 is increasingly doubtful. Leasing policies intended to prevent production from rising too high do not bode well for the longer term.
The dearth of deepwater discoveries over the past 6 years (chart below derived from BOEM data) should be a major concern to those engaged in energy policy. Technical innovation has facilitated simpler, safer, and greener deepwater development. However, most of those discoveries were made 7-15 years ago.
The decline in discoveries is no surprise given the decline in deepwater exploratory drilling documented by Lars Herbst in Dec. 2022. That trend continues, and the BSEE data summarized below indicate that deepwater exploratory drilling has remained at historically low levels.
Onshore oil and gas production, mostly from private lands, has responded to growing US demand, but the offshore sector could be contributing more and offers some important advantages:
The Deepwater Advantage: fewer facilities + fewer wells + high production rates + efficient power generation + advanced processing + restricted flaring + pipeline transportation = fewer environmental impacts and low GHG intensity production
Gulf of Mexico wind: Undaunted by leasing failures, BOEM presses on
Posted in energy policy, Gulf of Mexico, Offshore Wind, tagged 2023 wind sale, 5 year leasing plan, BOEM, Gulf of Mexico, Hercate, OCS oil and gas leasing, OCSLA, Offshore Wind, unsolicited lease request on July 29, 2024| Leave a Comment »
GoM wind leasing update:
- BOEM’s highly promoted 2023 GoM wind sale was a bust. The sole bidder, the German company RWE, acquired a single lease.
- BOEM’s second GoM wind sale failed to get off the ground. Because only one company expressed interest in participating, that sale has been cancelled.
- BOEM is now surveying interest in other GoM areas as a result of an unsolicited lease request from Hercate Energy.
- If BOEM does not receive competing indications of interest, they may (and probably will) issue a noncompetitive lease to Hecate.
- BOEM calls Hercate an “industry leader.” However, per their website, Hecate is mainly a solar energy company with only 2 wind projects. Both of those wind projects are onshore (Kentucky), and are “in development” (i.e. not yet operating). Hercate is no doubt a fine company, but have they demonstrated the technical expertise and financial strength needed for offshore wind development?
BOEM’s aggressive wind leasing policy stands in stark contrast to their current oil and gas policy. Not a single oil and gas sale will be held in 2024. Were it not for a provision in the “Inflation Reduction Act,” the last 3 GoM sales (257, 259, and 261) would probably not have occurred.
The new 5 year oil and gas leasing plan confirms that the Dept. of the Interior (DOI) has no intention of fulfilling their statutory oil and gas leasing mandate. In announcing the new 5 year plan, DOI boasted that the plan includes the fewest sales (3) of any plan in the history of the program. DOI strongly implied that the only reason those 3 sales were included was to sustain the wind program.,
When we drafted the OCSLA amendments that authorize offshore wind leasing, we envisioned complementary and synergistic programs, not a dogmatic pro-wind bias. As experts like Daniel Yergin have repeatedly warned, the notion that wind energy can eliminate the need for oil and gas is pure folly.
Bud's Offshore Energy (BOE) 