December 2021 oil production averaged 1.713 million bopd, lower than expected and down from 1.794 million bopd in Novermber. Given that the production lost during Hurricane Ida was to have been fully restored, BOE expected production to average greater than 1.8 million bopd.
January data will be helpful but won’t be available until 31 March. GIven the importance of these data and advances in information management, more timely updates should be an objective. We note that Norway released January production data on 22 February.
October production rebounded to 1.744 million BOPD from the 2021 low of 1.064 million BOPD in September (Hurricane Ida). November and December production should exceed 1.8 million BOPD.
Per Shell, production at Mars and Ursa has restarted. Olympus was restarted on 10/1. The December production figures should give us a pretty good indication of stabilized GoM production post Ida.
As expected, BSEE’s 8/30 update indicates that the shut-in production volumes remain about the same. The process of inspecting facilities, returning workers (some of whom may be dealing with damage and other challenges at home), and restoring production will take some time.
Other than the sketchy reports about the Globetrotter II, there is no information on Ida-related offshore incidents at this time. .
A previous BOE post estimated that current stabilized GoM oil production rates were 1.7 – 1.8 million BOPD. EIA recently announced that May production was 1.791 million BOPD, which is consistent with our estimate. Per the chart below, GoM production was essentially unchanged from the beginning of the year despite a 37% increase in the price of oil (WTI) from 1 January to 31 May. This suggests that stabilized GoM production may have peaked pending first oil from several new projects.
Key production questions:
Will new production from Mad Dog 2, Vito, PowerNap, Thunder Horse South 2, and the recently sanctioned Whale project offset high depletion rates elsewhere in the deepwater GoM?
Looking further ahead, is deepwater GoM production sustainable without increased drilling activity? Per BSEE data, only 33 deepwater wells were started in 2021 YTD, just 18 of which are classified as exploratory. Drilling is thus at historic low levels. For reference, there were 477 wells started in 2001, 149 of which were exploratory. This level of activity facilitated a 30% growth in oil production, peaking at 2 million BOPD in 2019.
Regardless of one’s views on the urgency and timing of the “energy transition,” is there any doubt that oil and gas will continue to be important to our economy and security for years to come? If not, should deepwater GoM production, with its relatively low carbon intensity, be a core element of our energy strategy? To better understand the trade-offs, I suggest that BOEM’s Environmental Studies Program conduct a peer reviewed assessment of the carbon intensity of domestic and international supply alternatives. Product transportation considerations should be included in this assessment.
A fire at BP’s Valhall oil platform off Norway in the southern part of the North Sea forced the UK supermajor to halt production and evacuate the facility today.
This rulemaking will incorporate in its entirety and make mandatory the AmericanPetroleum Institute’s Recommended Practice 75, Development of a Safety andEnvironmental Management Program for Offshore Operations and Facilities, with respectto operations and activities under the jurisdiction of BOEMRE. This final rule will applyto all OCS oil and gas and sulphur operations and the facilities under BOEMREjurisdiction including drilling, production, construction, well workover, well completion,well servicing, and DOI pipeline activities.
The rule will become effective on November 15, 2010.
The Florida Legislature may soon decide whether to lift the 20 year ban on oil and gas exploration and production in State waters.
As part of the review process, the State has prepared a list of questions on the management and regulation of offshore oil and gas resources. Responses to these questions will help define the general terms of the regulatory regime that the State would follow if the ban is lifted.
The State is inviting input on any or all of the questions. Please email your responses to adam.blalock@myfloridahouse.gov by the close of business on Monday, March 15. Response should be limited to no more than 500 words per question.
Bud's Offshore Energy (BOE) 