Deepwater Gulf of Mexico 2004: America's Expanding ... - OCS BBS

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Mississippi Alabama Georgia Louisiana Florida Texas 1500 ft 1000 ft Mississippi Canyon De Soto Canyon 4 East Breaks Alaminos Canyon 5000 ft 7500 ft Western Planning Area Garden Banks Keathley Canyon Sigsbee Escarpment Green Canyon Walker Ridge Amery Terrace Atwater Valley Lund Lund South Central Planning Area Lloyd Ridge Henderson Florida Plain Eastern Planning Area Royalty Relief Zones (meters) 200 - 399 400 - 799 800 - 1,599 > 1,600 50 0 50 mi 50 0 50 km N Figure 1. The Gulf of Mexico OCS is divided into Western, Central, and Eastern Planning Areas. Water-depth categories used in this report are shown in addition to shaded Deep Water Royalty Relief Act zones.
EXPANDING FRONTIER When the original version of this report (Cranswick and Regg, 1997) was published in February 1997, a new era for the GOM had just begun with intense interest in the oil and gas potential of the deepwater areas. There were favorable economics, recent deepwater discoveries, and significant leasing at that time. In February 1997, there were 17 producing deepwater projects, up from only 6 at the end of 1992. Since then, industry has been rapidly advancing into deepwater and, indeed, many of the anticipated fields have begun production since the 1997 report. The previous version of this report (Baud et al., 2002)highlighted dramatic advancements from 1997 through 2001. Significant advances have continued and are described in this report. At the end of 2003, there were 86 producing projects in the deepwater GOM, up 51 percent in the two years since Baud et al. (2002). Deepwater production rates have risen by well over 100,000 barrels of oil per day (BOPD) and 400 million cubic ft of gas per day (MMCFPD), respectively, each year since 1997. The dramatic shift toward high activity levels in the deepwater GOM occurred during the last few years, although it had been developing for over two decades. Deepwater production began in 1979 with Shell’s Cognac field, but it took another five years before the next deepwater field (ExxonMobil’s Lena field) came online. Both developments relied on extending the limits of platform technology used to develop the GOM shallow-water areas. Deepwater exploration and production grew with tremendous advances in technology since those early days. This report focuses on changes during the last 12 years, 1992-2003. Over the last 12 years, there has been an overall expansion in all phases of deepwater activity. There are approximately 7,800 active leases in the Gulf of Mexico OCS, 54 percent of which are in deepwater. (Note that lease statuses may change daily, so the current number of active leases is an approximation.) Contrast this to approximately 5,600 active Gulf of Mexico leases in 1992, only 27 percent of which were in deepwater. On average, there were 29 rigs drilling in deepwater in 2003, compared with only 3 rigs in 1992. Likewise, deepwater oil production rose over 840 percent and deepwater gas production increased about 1,600 percent from 1992 to 2002. Although deepwater production and the number of discoveries have increased substantially, some measures of deepwater activity have declined since the last report. There have been decreases in the average bid amount per block, average number of rigs operating, the number of wells drilled, and the number of deepwater plans submitted. All phases of exploration and development moved steadily into deeper waters over the past 12 years. This trend is observable in seismic activity, leasing, exploratory drilling, field discoveries, and production. Major oil companies dominated deepwater leasing activity until 1996, when the activity of nonmajor companies increased. Major oil companies continue to dominate deepwater oil and gas production. Production from major oil companies has continued to increase steadily, but production from nonmajor companies has remained flat. The OCS Deep Water Royalty Relief Act (DWRRA; 43 U.S.C. §1337) has had a significant impact on deepwater GOM activities. This legislation provides economic incentives for operators to develop fields in water depths greater than 200 m (656 ft). These incentives include the suspension of Federal royalty payments (for new leases issued 1996-2000) on the initial 17.5 million barrels of oil equivalent (MMBOE) produced from a field in 200-400 m (656-1,312 ft) of water, 52.5 MMBOE for a field in 400-800 m (1,312-2,624 ft) of water, and 87.5 MMBOE for a field in greater than 800 m (2,624 ft) of water. 1 1 Whether leases issued under the DWRRA (November 28, 1995 through November 28, 2000) are entitled to incentives on a field or a lease basis is currently under litigation. 5
Page 2 and 3: ON COVER - The cover features four
Page 5 and 6: Table of Contents Page PREFACE.....
Page 7 and 8: Figures Page Figure 1. The Gulf of
Page 9 and 10: Figures — continued Page Figure 5
Page 11: Tables Page Table 1 List of Deepwat
Page 15 and 16: INTRODUCTION The deepwater Gulf of
Page 17: BACKGROUND DEFINITIONS The GOM Oute
Page 21 and 22: 1992 - 1993 Louisiana Mississippi A
Page 23 and 24: 1992 - 2003 Texas Louisiana Mississ
Page 25 and 26: fffffffffffffffff 1500 ft Quaternar
Page 27 and 28: In addition to the traditional oil
Page 29 and 30: 15 Figure 8. Gas hydrates on the se
Page 33 and 34: 4,500 4,000 Number of Active Leases
Page 35 and 36: ENVIRONMENTAL ACTIVITY The extensiv
Page 37 and 38: Operators submit a remotely operate
Page 39 and 40: 25 Figure 15. Loop and eddy current
Page 43 and 44: 29 Deepwater Discoveries $ #Y Texas
Page 45 and 46: 31 Texas ð PORT ARANSAS 1000 ft 15
Page 47 and 48: Louisiana Mississippi Alabama 33 Te
Page 49 and 50: Pipelines New pipelines Proposed pi
Page 51 and 52: LEASING Until the mid-1990's, leasi
Page 53 and 54: Number of Leases Bid On 600 500 400
Page 59 and 60: 2004 - 2005 (741 leases) Louisiana
Page 61 and 62: DRILLING AND DEVELOPMENT Deepwater
Page 63 and 64: 49 Figure 30. The Discoverer Deep S
Page 65 and 66: 51 Number of Wells Spudded 250 200
Page 67 and 68: 120 > 7,500 ft 107 108 100 5,000 -
Page 69 and 70:
1998 - 1999 Louisiana Mississippi A
Page 71 and 72:
1998 - 1999 Louisiana Mississippi A
Page 73 and 74:
180 160 Deepwater EP Deepwater DOCD
Page 75 and 76:
340 626 390 472 472 456 393 475 590
Page 77 and 78:
Year of First Production Table 4 De
Page 79 and 80:
Year of First Production Table 4 De
Page 81 and 82:
A predominant workhorse of the GOM
Page 83 and 84:
3 Number Installed 2 1 0 2004 69 TL
Page 85 and 86:
Flow lines to host platform Subsea
Page 87 and 88:
140 131 120 100 78 Number of Wells
Page 89 and 90:
RESERVES AND PRODUCTION The deepwat
Page 91 and 92:
77 Million Barrels of Oil Equivalen
Page 93 and 94:
18 16 14 12 10 8 Number of Fields 6
Page 95 and 96:
81 Million Barrels of Oil Equivalen
Page 97 and 98:
45,000 40,000 Million Barrels Oil E
Page 99 and 100:
1992-1993 1994-1995 1996-1997 Lease
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S hallo w- wa ter GOM 11% Deepwater
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1,200,000 1,000,000 Total productio
Page 105 and 106:
1,100,000 1,000,000 Subsea oil Tota
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900,000 800,000 Majors Nonmajors 70
Page 109 and 110:
45,000 40,000 Max oil rate 1,000-1,
Page 111 and 112:
4,000 3,500 Shallow water Deepwater
Page 113 and 114:
Texas Auger Louisiana SS182 Troika
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SUMMARY AND CONCLUSIONS This report
Page 117 and 118:
2,500 Number of leases Average U.S.
Page 119 and 120:
Number of Years 14 12 leas es in p
Page 121 and 122:
data for this analysis include only
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80 2500 70 60 Number of leases dril
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4,500 4,000 3,500 Leases tested Lea
Page 127:
• Nonmajor companies have made mo
Page 131:
REFERENCES Bascle, B. J., L. D. Nix
Page 134 and 135:
Project Name Area/Block Water Depth
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Page 144 and 145:
Page 146 and 147:
Sale Number Sale Location Sale Date
Page 148 and 149:
Completed Studies [MMS Study Number
Page 150 and 151:
Group Name Company Name MMS Number
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Group Name Company Name MMS Number
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Appendix G. Subsea Completions. Are
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Area Block API Number Operator Comp
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Area Block API Number Operator 144
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Page 162 and 163:
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Year Shallowwater Oil (MBOPD) Deepw
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