Companies approach MMS with FPSO plans

Offshore Staff

(US, GoM) - Several oil companies have approached the MMS and US Coast Guard with the intent of deploying an FPSO in the US Gulf of Mexico, says Chris Oynes, MMS GoM regional director.

The industry is stepping up its efforts as of late to push for acceptance of a feasible FPSO-type facility for installation in the GoM. "I would not be surprised if an application for an FPSO is submitted in 2006," said Oynes at an OTC press conference.

Oynes announced the launch of the MMS' latest deepwater report and cited a number of statistics to indicate the growing trend in deepwater E&P. Currently, there are 46 rigs drilling in 1,000 ft of water or greater, which is just two shy of a record 48 rigs drilling in deepwater at a given time.

This is due in part to the significant number of leases that are scheduled to expire by the end of next year, says Oynes. More than 2,270 undrilled 10-year leases are slated to lapse unless a discovery is made or an extension is filed. Oynes expects that around 90% of these leases will expire and be turned over to the government.

In addition, three deepwater developments are expected to come online and contribute large volumes of production by the end of next year, he adds. The Thunder Horse, Atlantis, and Independence Hub projects are all scheduled to achieve first production during this timeframe. Oynes also pointed out that Chevron's Jack and BHP's Chinook fields show significant commercial potential.

05/02/06