U.S. crude oil manufacturing within the Federal Gulf of Mexico (GOM) elevated barely in 2017, reaching 1.65 million b/d, the very best annual degree on file. Though briefly hindered by platform outages and pipeline points in December 2017, oil manufacturing within the GOM is anticipated to proceed growing in 2018 and 2019. That is primarily based on forecasts within the EIA’s newest Brief-Time period Power Outlook (STEO). EIA expects the GOM to account for 16% of whole U.S. crude oil manufacturing in every year.
Primarily based on STEO’s anticipated manufacturing ranges at new fields and present fields, annual crude oil manufacturing within the GOM will enhance to a median of 1.7 million b/d in 2018 and 1.eight million b/d in 2019. Nonetheless, uncertainties in oil markets should still have an effect on long-term planning and operations within the GOM, and the timelines of future tasks could change accordingly.
In 2016, producers introduced seven new tasks and expansions on-line and ramped up manufacturing in 2017, collectively contributing to a median of 126,000 b/d of manufacturing in 2017. One other two tasks got here on-line in 2017, contributing 10,000 b/d of latest manufacturing final yr. EIA expects these 9 tasks to ramp up over the subsequent two years. Producers count on 4 new tasks to return on-line in 2018 and 6 extra in 2019.
Due to the period of time wanted to find and develop giant offshore tasks, oil manufacturing within the GOM is much less delicate to short-term oil value actions than onshore manufacturing within the Decrease 48 states. In 2015 and early 2016, lowering revenue margins and diminished expectations for a fast oil value restoration prompted many GOM operators to drag again on future deepwater exploration spending and to restructure or delay drilling rig contracts, inflicting common month-to-month rig counts to say no by means of 2017.
Latest crude oil value will increase haven’t but had a major impact on operations within the GOM, however they’ve the potential to contribute to growing rig counts and area discovery within the coming years. In contrast to onshore operations, falling rig counts don’t have an effect on present manufacturing ranges, however as an alternative have an effect on the invention of future tasks and fields.
In March 2018, the Bureau of Ocean Power Administration held a lease sale for greater than 14,000 Federal Gulf of Mexico blocks, most of which didn’t obtain any bids. Though the outcomes of this public sale is not going to have an effect on GOM manufacturing inside the Brief-Time period Power Outlook forecast horizon (by means of 2019), the extent of curiosity for leases could have longer-term implications for GOM crude oil manufacturing.
Principal contributor: Danya Murali