Expanding Frontier In Deepwater Is Focus Of New Report

A new publication, Deepwater Gulf of Mexico 2002: America’s Expanding Frontier (OCS Report (MMS 2002-021), has been released by the Minerals Management Service (MMS), Gulf of Mexico OCS Region, Regional Director Chris Oynes announced today at the Offshore Technology Conference in Houston. The expanded report details the extraordinary growth of oil and gas industry activity in the deepwater (1,000 ft of water or more) Gulf over the past seven years and anticipates continued growth.

"A certain level of maturity has now been reached, and the deepwater Gulf of Mexico is an expanding frontier," said Mr. Oynes. He points to the 51 deepwater projects on production at the end of last year, more than triple those of four years ago. "In fact," he adds, "a record 14 deepwater projects began production last year, and another 13 are expected to begin this year." Just how important this growth is can be seen in the fact that 59 percent of all oil production in the Gulf now comes from deepwater.

"One of the newest and most remarkable trends," noted Oynes, "is the trend to use subsea completions. There are now 82 subsea completions in deepwater with 30 of the 51 deepwater projects relying solely on a subsea completion tied back to some other facility. This is the wave of the future."

The report examines the technology of deepwater oil and gas exploration and production, including the state-of-the-art floating platforms and seafloor installations. It looks at the process and history of oil and gas leasing, including recent mergers and the roles of smaller companies, and environmental protection. The section devoted to reserves and production discusses recent finds, estimates of recoverable petroleum hydrocarbons in the deepwater Gulf, and deepwater production from various companies.

The report concludes by looking towards the future— the expected continuing increases in production, anticipated new fields, anticipated additional deepwater discoveries, the lags between leasing and production, and the difficulties of evaluating leases before these expire, given the shortage of offshore deepwater rigs.

MMS is the federal agency in the U.S. Department of the Interior that manages the nation's oil, natural gas and other mineral resources on the outer continental shelf in federal offshore waters. The agency also collects, accounts for and disburses mineral revenues from federal and Indian leases. These revenues totaled nearly $10 billion in 2001 and more than $120 billion since the agency was created in 1982. Annually, nearly $1 billion from those revenues go into the Land and Water Conservation Fund for the acquisition and development of state and federal park and recreation lands.