Posted in climate, Gulf of Mexico, Offshore Energy - General, tagged 2 million bopd, Gulf of Mexico oil production, no tropical storm impacts on December 29, 2023| Leave a Comment »
EIA reports October production of 1.959 million bopd. September production was revised down from 2.000 to 1.999 million bopd, a very slight but symbolically significant change. Foul play? 😉
For the past 2 years, no tropical storms have significantly impacted Gulf of Mexico production. Don’t expect this to be reported elsewhere 😉
Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, Wind Energy, tagged 5 year leasing plan, carbon sequestration, Gulf of Mexico exploration slump, Gulf of Mexico oil production, offshore leasing, Offshore Wind on August 16, 2023| Leave a Comment »
Record low exploratory drilling: 2023 will be the third consecutive year with fewer than 50 deepwater exploratory well starts. The only other year this century with <50 deepwater exploratory well starts was 2010 when there was a post-Macondo drilling moratorium.
Low participation: Only 8 companies have started deepwater exploratory wells in 2023 YTD. Anadarko, Chevron, and Shell drilled 78% of the wells, with Shell alone accounting for 48%. Compare these numbers with 2001, when 24 companies drilled 149 deepwater exploratory wells.
Absence of new field discoveries: Per BOEM’s database, no deepwater fields have been discovered since March 2021 and there were only 3 discoveries in the past 5 years (see chart below)
Leasing and regulatory uncertainty: When will the 5 year leasing plan be finalized and how much will leasing be restricted? What will be the effect of the expanded Rice’s whale area on deepwater operations? To what extent is this expansion justified? What other legal and regulatory threats are on the horizon?
Unrealistic expectations regarding the “energy transition:” In a stunning introductory statement, the Proposed 5 Year Leasing Plan expressed concerns that new leases would produce too much oil and gas for too long. OPEC+ must love the way the US sanctions its own energy production, most notably the oil and gas resources of the OCS. More than 96% of the OCS is off-limits to oil and gas leasing, and the 5 year plan proposed to constrain leasing in the only areas that remain. The favored offshore wind program was intended to be a complement to, not a replacement for, the oil and gas program. Wind energy is limited by intermittency, space preemption, navigation, and wildlife protection concerns.
Some companies have visions of the GoM as a carbon dumping hub: The largest US oil company, which hasn’t drilled a well in the GoM in nearly 4 years and operates just one production platform, seeks praise and profit by sequestering CO2 beneath the Gulf while maximizing oil production elsewhere. How will this sustain economically and strategically important GoM oil and gas production?
Posted in Gulf of Mexico, Offshore Energy - General, tagged 2023 oil production, Gulf of Mexico oil production on May 1, 2023| Leave a Comment »
Posted in Gulf of Mexico, Offshore Energy - General, tagged 2023, Gulf of Mexico oil production, King's Quay, Murphy, Shell, Vito on March 31, 2023| Leave a Comment »
The encouraging start to 2023 GoM production is likely due, at least in part, to Shell’s Vito and Murphy’s King’s Quay ramping up production. Other deepwater startups should boost production later this year.
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged 5 year leasing plan, BOEM, EIA, Gulf of Mexico oil production, OCSLA, production forecasts on January 17, 2023| Leave a Comment »
As is evident from the first table below, the EIA’s new short-term production forecast for the Gulf of Mexico differs significantly from the optimistic BOEM forecast.
The EIA 2022 figure is spot-on, as it should be given that 10 months of 2022 production data are now in hand. However, BOEM’s 2022 forecast (published in July) missed the mark considerably. (In fairness to BOEM staff, their work was probably completed months before publication pending internal reviews.)
Of greater concern, given the policy implications, is the rosy BOEM forecast for the out-years. Despite historically low levels of leasing and exploratory drilling, BOEM forecasts oil production to exceed 2 million BOPD through 2027 and to remain well above the current (2022) level through 2031 (second table below).
As previously noted, the authors of the proposed 5 year OCS leasing plan have used the BOEM forecasts to justify a skeleton leasing plan that is unprecedented in program history. Contrary to the OCS Lands Act’s mandate and EIA projections regarding future oil and gas consumption, the proposed leasing plan not so subtly announces the intention to phase out the offshore oil and gas program.
| 2022 | 2023 | 2024 | |
| EIA | 1.75 | 1.87 | 1.85 |
| BOEM | 1.892 | 2.000 | 2.013 |
Posted in accidents, Gulf of Mexico, Offshore Energy - General, pipelines, tagged Gulf of Mexico oil production, Mars pipeline, Shell on August 13, 2022| Leave a Comment »
Assuming no significant tropical storm shutdowns this month, we should get a good read on the impact of the pipeline outage when the EIA production data for August are posted.
Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, tagged 2022 production forecast, 5 year leasing plan, BOEM, EIA, Gulf of Mexico oil production, King's Quay on July 7, 2022| Leave a Comment »
April production increased from March by 72,000 BOPD to 1.763 million BOPD. The increase is associated, at least in part, with Murphy’s King’s Quay field which began producing in early April. 2022 GoM production remains below the levels reached in the first 7 months (pre-Hurricane Ida) of 2021, and is well below BOEM’s forecasted 2022 production rate of 1892 MBOPD. Perhaps BOEM was assuming earlier startup dates for other projects that will begin production later this year or next year. The 2022 YTD dip in production points to the importance of sustained exploration and development.
BOEM’s short-term production forecast is considerably more optimistic than EIA’s. This optimistic forecast, along with unrealistic expectations regarding the “energy transition” are reasons for proposing so few lease sales in the new 5 year leasing program. The logic for this minimalist leasing program seems to be that future production is neither necessary nor desirable. Indeed the program implies that the long-term nature of offshore production is a liability and is justification for limiting OCS oil and gas leasing:
“BOEM’s short-term (20-year) production forecast for existing leases shows steady growth from 2022 through 2024 and declining thereafter (see Section 5.2.1). The long-term nature of OCS oil and gas development, such that production on a lease can continue for decades makes consideration of future climate pathways relevant to the Secretary’s determinations with respect to how the OCS leasing program best meets the Nation’s energy needs.“
5 Year Leasing Program, p.3
Basing leasing decisions on “future climate pathways” would seem to be a considerable stretch of the Secretary’s authority under the OCS Lands Act and may be inconsistent with the recent SCOTUS decision in West Virginia vs. EPA. A strategic shutdown of the offshore oil and gas program would dramatically increase energy supply and security risks going forward, and should be authorized by Congress.
Bud's Offshore Energy (BOE) 