Seventy-four US Gulf deepwater fields awaiting development

The Gulf of Mexico deepwater fields. The numbers on the map correspond to the numbers on the chart with red being in production and yellow in planning. [248,997 bytes] Shell's Mensa subsea system. [35,655 bytes] Oryx's Neptune spar [32,700 bytes] Shell's Ram Powell TLP. [25,601 bytes] Gulf of Mexico Deepwater Survey [28,770 bytes] Gulf of Mexico Deepwater Survey cont. [27,843 bytes] With an ever-increasing number of deepwater fields being discovered and placed in production, the

Jan 1st, 1998

One-fourth of US Gulf discoveries are beyond the 1,000 ft contour

Marshall De Luca
Business Editor
With an ever-increasing number of deepwater fields being discovered and placed in production, the industry should consider throwing out the term "deepwater" and moving on to "ultra-deepwater."

In the US Gulf of Mexico, operators are beginning to add as many deepwater discoveries (1,000 ft) as those under the 1,000 ft contour. In fact, more than 25% of all discoveries in the US Gulf are in the deepwater realm. If discoveries continue at this rate, by the year 2000 deepwater discoveries will outnumber shallow water finds.

With this kind of growth, the industry will have to keep moving up the water depth mark for deepwater far beyond 1,000 ft in order to keep the somewhat ominous and challenging connotation of the term.

Currently, there are 104 deepwater prospects in the Gulf of Mexico. This is an increase of 22 new discoveries since January of 1997, and eight since September. With the pace of drilling in these areas, there is no sign of a slowup, even with weakening oil and gas prices.

According to the Minerals Management Services, deepwater drilling is at an all-time high. A record 31 rigs are simultaneously drilling in the Gulf's deepwater regions and total rig utilization for the Gulf is at 94%. There also are a number of new deepwater rigs on order as well as conversions and upgrades.

Production rising

Production from deepwater is also increasing. Thirty of the 104 prospects presently are in production, with the remaining 74 in some stage of planning or fabrication. In January, 1997, only 18 deepwater fields. By September, a total of 26 were producing, a significant ramp-up of activity.

The 30 fields now in production account for almost 20% of the total bbl of oil equivalent (BOE) production in the Gulf of Mexico. The majority of the producing fields (16) are using subsea installations, followed by five fixed platforms, four TLPs, three floating production systems, and one producing spar. Of the remaining 74 fields, 47 have been given prospect names, which indicates an intention to begin development in the near future.

With technological advances such as subsea installations and new drilling techniques available, the risk of drilling and producing in deepwater is declining, reducing overall costs. However, entry costs in deepwater are relatively high, especially on the production end of the business. This is why very few of the 34 operators in deepwater are independents.

Another factor is that the high-profile/high-return of deepwater operations and stable

US political climate are beginning to attract interest from many major foreign companies. Such companies as Elf and Agip hold a number of deepwater tracts. Norway's Statoil has also made a strong entry into the US Gulf with plans to focus entirely on deepwater.

Increased experience is also driving the deepwater push. A number of the discoveries were made in the late 1970s and early 1980s and are now being brought onstream. Most operating independents have already allianced with major operators in order to gain this experience, or are planning to do so.

Depth ranges

Even with the new advances and greater experience in water depths over 3,000 ft, the bulk of development activity is taking place in the 1,000-1,999 ft range, where 48 prospects are listed as developable. The 1,000-1,999 ft range has shown the greatest change since January, when 33 prospects were listed.

Sixteen fields are located in a water depth range of 2,000-2,999 ft, 21 more in the 3,000-3,999 ft depth range, and 18 in the 4,000 ft plus ultra-deepwater range. Shell holds the top ranking in the 4,000 ft plus depth range with six prospects, including the deepest discovery, in 7,620 ft depths. That discovery is the BAHA prospect in Alaminos Canyon 600.

With technology allowing for drilling and production to go deeper and deeper, 1,000 ft no longer looks remarkable. Perhaps in the future, the term deepwater will be reserved for greater than 2,000 ft or 3,000 ft.

Survey explanation

Offshore Magazine's US Gulf Deepwater Survey, which appears in the January and June issues, has been expanded to include more information than previous versions. Included are three new categories: discovery date, reserves (estimated and/or proven), and peak/test production.

The survey lists each field by name, location (block number), water depth, operator, stage of development and production type, year of discovery, year of first production, estimated or proven reserves in millions of bbl oil equivalent (BOE), and peak/test production (oil/gas). A dash indicates that the information was unavailable at press time.

Each listing has a number that corresponds to the preceding map. Numbers on the map in red indicate that the field is in production; numbers in yellow indicate the field is in the planning or fabrication stage.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.

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