Deepwater Oil and Gas Production in the Gulf of Mexico and Related Global Trends

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Book Chapter

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Ultra-deep oil, Congressional moratorium, Gulf of Mexico, Cantarell

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The marine oil industry in the Gulf of Mexico (GoM) began in 1938 with the construction of the first oil well platform built in 4 meters of water, a mile off the Louisiana coast. The Mexican marine oil industry began in the 1950s with exploration and low-level production off the city of Tampico in the state of Tamaulipas. The discovery of the massive Cantarell oil field off Campeche in 1976 led to rapid expansion of the Mexican industry, surpassing US production of GoM-derived oil. Total annual oil production from the GoM peaked in 2003 at 1.6 billion barrels, but has since declined to about 1.2 billion barrels. Production at the Cantarell field peaked in 2004 and has since declined by 90%. Both the US and Mexican oil industries have focused more recently on deepwater plays to support production. The US oil production by lease depth showed a steady offshore migration through the 1990s but a dramatic rise in ultra-deep (e.g., ≥1500 m water depth) production beginning in the 2000s. In 2017, 52% of US oil production was from ultra-deep wells. Beginning in 2013, Mexico liberalized its policies to allow international cooperative ventures for exploration and production, particularly focusing on deepwater sources. Several large discoveries off Mexico since 2015 portend higher offshore production in the 2020s when these fields come online. In the US GoM, marine-derived natural gas production has declined by 79% since 1997, to about 1 trillion ft3 in 2017, reflecting rapid increases in land-based gas sources from hydraulic fracturing, which are less expensive to produce that marine-derived gas. Over the next decade, shallow-water sources of oil and gas in the US GoM will be phased out or reduced in importance as additional ultra-deep sources are developed. In the US GoM these include plays in depths to 3000 m and potentially deeper off Mexico. Ultra-deep sources occurring in the “Golden Triangle” between West Africa, Brazil, and the GoM will likely dominate global ultra-deepwater production, but other frontier regions will doubtlessly be explored. The inherent risks of catastrophic well blowouts at extreme depths will increase as the productivity of oil facilities increases exponentially with water depth.

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Citation / Publisher Attribution

Deepwater Oil and Gas Production in the Gulf of Mexico and Related Global Trends, in S. A. Murawski, C. Ainsworth, S. Gilbert, D. Hollander, C. B. Paris, M. Schlüter, & D. Wetzel (Eds.), Scenarios and Responses to Future Deep Oil Spills – Fighting the Next War, Springer Nature, p. 16-32