Per the BSEE borehole file, there were 2 deepwater exploratory well starts since 4/1/2023. The Shell well is another GoM milestone in that it is the 150th well spudded in >8000′ of water. The first was in the year 2000.
Operator
spud date
location
water depth
Chevron
5/5/2023
Mississippi Canyon 608
6678′
Shell
4/13/2023
Alaminos Canyon 728
8660′
Arena and Cantium continue to drive shelf drilling. Below are the shelf development wells since 4/1/2023:
Deepwater (>1000′) activity continues to dominate, accounting for 61% of the well starts.
Not a single company drilled both shelf and deepwater wells.
While shelf facilities currently account for only about 7% of GoM oil production, 1122 of the 1179 remaining platforms are on the shelf and they account for 24% of GoM gas production, most of which is environmentally favorable nonassociated gas.
Two companies, Arena and Cantium, accounted for 75% of the shelf well starts. Excluding the CCS bids, Arena and Cantium were the most active shelf bidders in Sale 279. Arena bid alone on 7 blocks. Cantium was the high bidder on 5 blocks. (Focus Exploration was high bidder on 4 shelf blocks and was “outbid” by Exxon for High Island 177.)
One company, Shell, accounted for 39% of the deepwater well starts
One of BP’s exploratory wells (drilled subsequent to Sale 257) was in Green Canyon 821, immediately south of GC 777, the block that BP/Talos bid $1.8 million for in Sale 257. That bid was rejected by BOEM. In sale 259, BP was the sole bidder for GC 777, and their bid was only $583,000, less than 1/3 of their Sale 257 bid. Perhaps the GC 821 exploratory well reduced the value of GC 777? Will this lower bid now be accepted?
DW expl
DW dev
shelf expl
shelf dev
Anadarko
5
1
Arena
22
BOE
1
4
BP
2
3
Byron
2
Cantium
20
Chevron
3
Contango
2
Cox
2
Eni
2
5
EnVen
5
Greyhound
2
Hess
2
Kosmos
1
LLOG
3
1
Murphy
4
QuarterNorth
2
Shell
25
9
Talos
2
8
Walter
1
Woodside
3
1
Gulf of Mexico well starts during 2022 and the first quarter of 2023
The Honor Roll companies for 2022 (listed alphabetically) are Anadarko (Oxy), bp, Cantium, Chevron, Contango, Hess, LLOG, Murphy, and Shell.
Our criteria:
Must average <0.3 incidents of noncompliance (INCs) per facility-inspection.
Must average <0.1 INCs per inspection-type. (Note that each facility-inspection may include multiple types of inspections (e.g. production, pipeline, pollution, Coast Guard, site security, etc). On average, each facility-inspection included 3.25 types of inspections in 2022. Here is a list of the types of inspections that may be performed.)
Must operate at least 3 production platforms and have drilled at least one well (i.e. you need operational activity to demonstrate compliance and safety achievement).
May not have a disqualifying event (e.g. fatal or life-threatening incident, significant fire, major oil spill). Due to the extreme lag in updates to BSEE’s incident tables, investigation and news reports are used to make this determination.
Pacific and Alaska operations will be considered separately.
Without much hype, shelf operators continue to find and extract oil and gas from beneath the shallow waters of the GoM. The 1700 shelf platforms that remain provide energy for our economy and important hardbottom substrate for marine life. Keep it going! Only 25 more years until the 100th anniversary! 😀
Operating companies (listed alphabetically): Arena, Anadarko (Oxy), BHP, bp, Cantium, Chevron, Hess, Murphy, Shell, and Walter
Criteria:
Must average <0.3 incidents of compliance (INCs) per inspection. (This is less than half the GoM 2022 YTD average of 0.64 INCs/inspection.)
Must operate at least 3 production platforms.
Must have drilled at least one well.
Pacific and Alaska operations will be considered in a separate post.
Comments:
Impressive performance by Hess: 21 inspections and no INCs
Cantium and Walter averaged less than 0.1 INCs/inspection. The INC rates for Anadarko (Oxy), BHP, and BP were only slightly higher.
Among the Honor Roll companies, Shell (highest production, 9 deepwater platforms, and 13 well starts) and Arena (115 shelf platforms and 12 well starts) were the deepwater and shelf activity leaders.They thus had the highest INC exposure.
Although CSI and FSI INCs are typically more significant than W INCs, that is not always the case, so the INCs have not been weighted by type.
As has been previously noted, more inspection data should be readily available online. At a minimum, the specific INC (type) numbers (e.g. P-103, G-110, etc) should be posted so the public can better assess performance. Absent this information, interested parties are left to speculate about the significance of the violations.
While compliance is not synonymous with safety, most experienced observers believe there is a strong correlation. In the 1990’s, John Shultz, a PhD candidate at Carnegie Mellon Univ., studied US offshore facilities and safety data and developed expert and regression models to predict the likelihood of accidents and spills. That was a data rich era in that there were ~4000 US offshore platforms (more than twice the current number) and ~100 well starts/month (>10 times the current rate). In John’s thesis, he found that INCs are a very good predictor of accidents and spills. The offshore world has changed and further study of the correlation between compliance and safety performance is highly recommended.
Operating companies that produced >1 million bbls of oil or >1 BCF of gas in 2021 are listed in descending order based on oil production.
Both the total number of well starts and the number of exploratory wells are indicated
An INC is an Incident of Noncompliance (i.e. a violation). W=warning, CSI=component shut-in, and FSI=facility shut-in are the enforcement actions.
All of the below data are publicly available on the BSEE-BOEM websites.
2021 oil (MMbbls)
2021 gas (BCF)
2021/22 well starts total-expl
2021/22 INCs W-CSI-FSI
Shell
149.8
190.8
28-12
11-14-4
bp
114.0
82.7
5-2
6-3-4
Chevron
83.7
42.2
8-8
1-1-3
Anadarko (Oxy)
67.7
57.8
8-6
8-5-1
Hess
27.5
61.7
2-2
7-4-0
Murphy
25.1
50.0
7-7
4-8-1
LLOG
20.4
29.0
3-0
1-1-1
Talos
17.7
23.0
5-0
25-26-14
BHP
14.5
5.9
3-2
2-3-0
Exxon
13.2
2.3
–
1-1-1
Beacon
10.5
15.7
1-0
0-0-0
Fieldwood
10.4
24.7
–
685-235-91
EnVen
9.6
12.6
6-0
2-6-3
Kosmos
9.4
8.4
1-1
1-0-0
Arena
8.6
27.9
32-0
68-45-19
Walter
8.1
36.2
2-2
3-1-2
Cox
6.2
30.3
–
237-169-3
Eni
4.7
13.6
2-0
8-0-2
W&T
5.0
27.2
1-0
65-40-7
Cantium
4.5
5.5
18-0
23-15-2
QuarterNorth
4.2
8.3
–
no data
GoM Shelf
2.3
4.8
–
52-5-2
ANKOR
1.4
2.5
–
0-0-1
Byron
1.0
4.4
–
5-8-2
Renaissance
0.7
1.6
–
20-9-3
Sanare
0.3
4.5
–
38-20-3
Helis
0.2
1.2
–
1-0-2
Contango
0.03
5.0
–
4-0-0
Samchully
0.02
1.2
–
no data
Comments:
“Energy transition” companies Shell and bp still love the Gulf of Mexico, which is a good thing for them and us. Together they accounted for 42.4% of the 2021 oil production.
The top 4 producers, Shell, bp, Chevron (includes Unocal), and Anadarko accounted for 2/3 of GoM oil production, nearly all of which was from deepwater leases.
Those are impressive production numbers for Anadarko (Oxy). No wonder Warren Buffett likes Oxy stock.
The relative number of deepwater exploratory wells is mildly encouraging given our concerns about sustaining production.
Exploratory well determinations are rather subjective and may not be entirely consistent.
Understandably, no exploratory wells were drilled by Arena or Cantium, the companies responsible for most well operations on shelf (shallow water) leases.
Overall, the INC numbers are impressively low for the deepwater operators, with Chevron and LLOG standing out. BSEE does not post the specific violation information (more on this in an upcoming post), so it’s difficult to properly assess a company’s compliance record.
Unfortunately, incident data could not be included on the scoreboard. BSEE’s incident tables are badly out of date, and no 2021/2022 summaries have been posted.
Exxon production is limited to the Hoover Diana spar, which was installed 22 years ago. The largest US oil company has only drilled one GoM exploratory well (2018) in the past 5 years. Currently, their main GoM interest seems to be the sequestration (disposal) of onshore emissions. (More on this topic in an upcoming post.)
Bud's Offshore Energy (BOE) 