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

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LEASE OWNERSHIP A handful of major oil and gas companies blazed the trail into deepwater in the 1980’s and early 1990’s. In this report, we define major companies to include BP, ChevronTexaco, ExxonMobil, and Shell. Appendix E shows the companies and subsidiaries that form these majors. (Grouping of these four entities does not indicate a regulatory conclusion or an analysis of production size. It is merely a convenient category for the purpose of comparison.) Figure 27 illustrates the relative leaseholding positions of majors versus nonmajors. (Figure 27 reflects the most recent lease ownerships at the end of each 2-year period.) Note that majors dominated deepwater leasing in 1992-1993. In 1996, nonmajors began acquiring significant leaseholdings, a trend that continued through 2003. Nonmajor companies are poised to play a leading role in the future of the deepwater Gulf. The type of companies active in deepwater clearly changed with the increased presence of nonmajor oil and gas companies. Another change in deepwater lease ownership came with the wave of company mega-mergers. The industry mergers increased the diversity of leaseholdings for the merged companies. For example, while some companies were heavily focused on the deepwater GOM prior to the mergers, their merger partners may have been focused primarily on shallow-water prospects. The combination of these entities yielded a larger leasehold position in all water depths and frequently a broader geographic range across the GOM. FUTURE LEASE ACTIVITY Since the deepwater arena is already heavily leased, the number of leases that are relinquished or expire will influence activity in future lease sales. Given the fact that most companies can only drill a small percentage of their active leases, it is likely that many high-quality leases will expire without being tested. The impending turnover of these leases often results in “farm-outs” to nonmajors, opportunities for different companies to gain a lease position and, potentially, a more rapid exploration and development of the acreage. Ultimately, an untested and undeveloped lease will expire and possibly be leased again. Figure 28 shows leases that will expire in the coming years, assuming each lease expires at the end of its primary lease term (without a lease-term extension). Note that lease terms vary according to water depth. Primary lease terms are five years for blocks in less than 400 m (1,312 ft), eight years for blocks in 400-799 m (1,312-2,622 ft), and ten years for blocks in 800 m (2,625 ft) or greater. Therefore, in the absence of primary lease-term extensions, all active shallow-water leases will expire before 2010 (explaining the absence of expiring shallow-water leases in certain frames of figure 28). The 2003 and 2004 lease sales will offer a limited number of expired deepwater leases because of moderate leasing activity in 1993 and 1994. The availability of previously leased blocks is expected to increase dramatically in 2006 as a result of the leasing boom that began in 1996 and continued through 1998. The lease expiration projections will pressure leaseholders to drill and evaluate their holdings and will provide opportunities for other companies to enter an active play by acquiring leases as they expire or by obtaining “farm-outs” from companies with untested acreage. 42
1992 - 1993 Louisiana Mississippi Alabama 112 332 Florida Texas 1,297 5000 ft 7500 ft 1000 ft 1500 ft 1994 - 1995 Louisiana Mississippi Alabama Florida Texas 5000 ft 7500 ft 1000 ft 1500 ft 1996 - 1997 Louisiana Mississippi Alabama Florida Texas 5000 ft 7500 ft 1000 ft 1500 ft 50 0 50 mi 50 0 50 km Leases with greater than 50% major ownership Leases with 50% major ownership Leases with less than 50% major ownership Figure 27. Ownership of deepwater leases. 43
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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 and 18: BACKGROUND DEFINITIONS The GOM Oute
Page 19 and 20: EXPANDING FRONTIER When the origina
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 55: 1998 - 1999 Louisiana Mississippi A
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 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
Page 101 and 102: S hallo w- wa ter GOM 11% Deepwater
Page 103 and 104: 1,200,000 1,000,000 Total productio
Page 105 and 106: 1,100,000 1,000,000 Subsea oil Tota
Page 107 and 108:
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
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Texas Auger Louisiana SS182 Troika
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SUMMARY AND CONCLUSIONS This report
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2,500 Number of leases Average U.S.
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Number of Years 14 12 leas es in p
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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
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• Nonmajor companies have made mo
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REFERENCES Bascle, B. J., L. D. Nix
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Project Name Area/Block Water Depth
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Sale Number Sale Location Sale Date
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Completed Studies [MMS Study Number
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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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Year Shallowwater Oil (MBOPD) Deepw
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