Outlook is improving in the Gulf of Mexico


Deepwater permits are rising and rig utilization is growing in the Gulf of Mexico, indicating rising confidence after four years of declining drilling, Petroleum Economist reports.

According to World Oil’s mid-year survey results and federal officials’ outlook, Gulf of Mexico well counts were set to start recovering during the second half of 2019. World Oil estimated that Gulf activity totaled 65 wells in the first half of 2019, with another 74 scheduled to be drilled during second-half 2019. That’s up 25% over 111 in 2018.

Consultancy Wood Mackenzie expects exploration activity in the Gulf to have increased 30% in 2019, led by Shell and Chevron, plus growth from new entrants such as Kosmos Energy, Equinor and Total. WoodMac added that new project sanctions could usher in $10bn investment into the GOM, plus the first-ever Jurassic production. Bureau of Safety and Environmental Enforcement Director Scott Angelle says that the 2018 uptick in deepwater drilling permits that his agency issued made him optimistic for 2019 and beyond.

In July, 80 miles south of New Orleans, Shell’s high-temperature, high-pressure  Appomattox became the first project of its kind to receive Bureau of Safety & Environmental Enforcement approval to begin production, according to Deepwater Economist. Talos Energy reported two wildcat strikes in its Bulleit and Orlov prospects of Green Canyon in the deepwater Gulf of Mexico, off Louisiana’s coast. The Bulleit well will be completed during first-half 2020 and then tied back to the Talos-owned/operated Green Canyon facility 10 miles west.

Approved permits for shallow and deepwater wells in the U.S. Gulf of Mexico total 787 year-to-date October 2019. That figure includes 594 in deeper water greater than 500 feet, and 193 in shallow water of less than 500 feet. In 2018, BOEM approved 913 permits, 728 in deeper water and 185 in shallow water, a gain of 128 compared to 2017. The U.S. Gulf of Mexico rig count for August 2019 was 24, up from 18 during August 2018, with most rigs working offshore Louisiana.

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