NORTH AMERICA

US GULF OF MEXICO - Drilling in the US Gulf of Mexico is at a frantic pace, breaking decade-old records, with rig utilization effectively at 100%. Led by an exciting, extraordinary deepwater exploration and production program ramroded by Shell Offshore and paralleling if not outpacing the equally exciting Brazilian deepwater program, by a remarkable subsalt E&P program headed by Amoco and Phillips, and by a thundering shallow water/transition zone program being carried out by majors and

May 1st, 1997

US GULF OF MEXICO - Drilling in the US Gulf of Mexico is at a frantic pace, breaking decade-old records, with rig utilization effectively at 100%. Led by an exciting, extraordinary deepwater exploration and production program ramroded by Shell Offshore and paralleling if not outpacing the equally exciting Brazilian deepwater program, by a remarkable subsalt E&P program headed by Amoco and Phillips, and by a thundering shallow water/transition zone program being carried out by majors and independents alike, the US Gulf is defying all predictions of its demise.

Undoubtedly precipitated by expanding demand and a record low supply level, and propelled by both the growing price of oil, now edging over $20/bbl, and gas's climb in price to over $2.50, the record number of rigs working in the US Gulf of Mexico is stretching the capacity of the drillers to meet demand and strengthening the call for newbuilds now that all but the worst derelicts have been rebuilt and pressed into service.

Drilling is almost evenly divided between development over exploration, but that is partly due to the extensive employment of extended reach and directional drilling to tap into additional reservoirs and get the most from existing fields, as well as to explore associated structures and new plays.

That is not to say that everything that can be drilled is being drilled. Numerous deepwater tracks still await development, and since the September licensing of much of this prime aquatory in the Western Gulf of Mexico ( the highest bids received on Gulf tracks since 1983), major deepwater operators such as Shell, Chevron, and Texaco have been off and running with whole new plays in places like Alaminos Canyon, Walker Ridge, and Garden Banks on the US frontier with Mexico.

ALASKAN WATERS - Elsewhere in North America (Mexico is covered below under Latin America), Alaska is finally seeing a little more offshore activity, perhaps spurred into life by President Clinton's repeal of the 22-year ban on Alaskan North Slope exports. BP is the first to export, but both BP and Unocal have been reappraising their holdings in the Beaufort Sea and Cook Inlet to determine where to focus their efforts.

CANADA - There have been a few rumblings out of the northwestern Canadian frontier on the Beaufort Sea, but licensing announcements for this area as well as Banks Island and the Sverdrup Basin of the Arctic Islands, where the Hecla Field (3 tcf gas) is located have effectively gone unnoticed.

On the east, however, things are picking up appreciably. Newfoundland's massive Hibernia Grand Banks project is rapidly approaching this year's completion date, with first production expected this fall, and a genuine production schedule to kick off next year from the 3 billion-ton field. Nearby, PetroCanada's Terra Nova Field is about to see development, as is the associated Whitehorse Field. Forty km southeast, West Bonne Bay is being explored by Amoco Canada, in a five- year, C$90-million program.

Still farther south, Canada's US$3 billion Sable Island gas project (to provide gas to the US east coast) has moved a bit closer to reality. Developers Shell and Mobil say the 3 tcf, six-field project will go onstream in 1999, at 400 million cf/d gas and 10,000 b/d liquids.

With an eye to revving up its Atlantic province, Canada is offering tracks throughout the area, many highly prospective, such as those in the 32,000-hectare Jeanne d'Arc Basin.

Currently Canada's only offshore production comes from the Nova Scotian Cohasset Field.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.

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