WoodMac Bullish on Gulf of Mexico

By Jennifer Pallanich
Friday, January 11, 2019

The outlook for the Gulf of Mexico for 2019 continues to improve.

Earlier this week, BP made public plans to expand its Atlantis field, reported new discoveries near its Na Kika platform, and credited a breakthrough in seismic imaging with identifying 1 billion barrels of additional oil in place at its massive Thunder Horse field. Given these developments, BP aims to grow its net GoM production to around 400,000 boe/d in the next decade.

“We’re glad to see some growth coming from BP,” said William Turner, senior research analyst at Wood Mackenzie.

BP’s announcement shows “the value of our industry finally applying these fancy words like big data and supercomputing.” The bigger picture, he said, is that there is a perception that the industry is not innovative. Using big data and supercomputing is evidence to the contrary, he said.

In mid-December, WoodMac released a bullish report on GoM activities for 2019. Despite oil prices dropping in the interim, Turner is still optimistic about activity in the region.

One high point is the expected FID for Chevron’s Anchor ultra high-pressure field at Green Canyon block 807 in 5,180ft.

“It’s a pretty technically challenging reservoir,” he said.

The field requires equipment that can handle operating pressures of 20,000 psi.

The industry will also be closely watching how Shell’s Appomattox field, in 7,400 feet of water in Mississippi Canyon block 392, performs.

Appomattox will produce Jurassic reserves to the company’s largest floating production platform when it goes onstream later this year.

If Appomattox, which is expected to produce 175,000 boe/d at peak, does well, Turner says, more companies might seek to lease and explore the Jurassic reservoirs.

Part of Turner’s confidence for the Gulf this year is the expectation that smaller E&P operators will be active. For the first time in four years, Turner noted, there is expected to be an increase in drilling in the GoM.

On the flip side, fluctuating oil prices may delay some cost hikes in the supply chain, he said.

“We were expecting inflation in the supply chain, but this dramatic fall in oil prices may have kicked that inflation out to 2020,” Turner said. “If it were my dollar, I would keep investing.”

Categories: Deepwater North America

Related Stories

Welcome to the App Store

Petrobras Extends Solstad Vessels Contract

Norway Approves Tordis Extension

ClampOn: Ultrasonic Intelligent Sensors

ExxonMobil Reports Discovery Offshore Guyana

Snefrid Nord Comes On Stream

Remote Technologies Augment Capabilities

Johan Sverdrup Nearing Early Start-up

Schlumberger, WesternGeco to Provide E&P Data

Tullow Makes Second Discovery Offshore Guyana

Current News

Ashtead Supports Subsea Template Installs

Norway Mulls Blocking Prosafe's Floatel Acquisition

Connector Subsea Solutions Acquires MORGRIP

CannSeal Debuts Mobile Mixer Technology

Oil Soars 10%

Tullow to Drill at Least 3 New Guyana Wells in 2020

ExxonMobil Reports Discovery Offshore Guyana

Kvaerner Eyes FPSO, Renewables Growth

Avoiding Subsea Controls Obsolescence

Sercel Launches New Ocean Bottom Node

Subscribe for OE Digital E‑News

OE Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week