GULF OF MEXICO

Michael Crowden
Houston

MMS indicators of activity in the US Gulf of Mexico show platforms installed and removed from 1985 through 1994, above, and pipeline segments and miles installed from 1991 through 1994, below.

Permanent ban sought for entire Outer Continental Shelf

Legislation to permanently ban US offshore drilling and leasing is being pursued by Rep Frank Riggs, a California Republican. Riggs is introducing two bills seeking a permanent drilling moratorium and an end to federal leasing of all offshore areas. Neither bill appears to be garnering much support.

The first bill seeks to enact into law an executive order by then-President George Bush that prohibits new oil and gas exploration in California and Florida until the year 2000. The second bill seeks to permanently ban new offshore oil and gas leasing in the entire US Outer Continental Shelf, including the Gulf of Mexico. Riggs says he feels he will get the support. "I'm now a member of the majority party. This legislation never went anywhere in a Democrat-controlled Congress. I think I'm in a key position to move this legislation."

OCS leasing ban removed, reinstated

The offshore industry won a minor battle in the fight to gain access to the OCS. The House Appropriations Subcommittee on the Interior voted seven to six to end a 14-year drilling ban on 266 million acres on the OCS, including tracts in the eastern Gulf of Mexico, off the east and west coasts, and offshore Alaska. "The costs of US vulnerability to oil price shocks are significant, and we should not ignore the warning signs," said subcommittee chairman Ralph Regula, an Ohio Republican.

However, the effort was short lived. The Appropriations Committee quickly reinstated the ban. "We are in a fighting mood," said Sen. Barbara Boxer, a California Democrat. "We are not going to allow Republican Congress to destroy a precious natural resource - our oceans and coastline."

The issue is not split along party lines, with supporters and opponents found among both parties. For example, all 25 members of the Florida delegation (16 Republicans and nine Democrats) support the ban to prevent new exploration or drilling offshore.

The drilling ban has been included in an appropriations bill for each of the past 14 years. It has the support of Minerals Management Service officials. MMS Director Cynthia Quarterman commented: "We have made great strides in moving toward consensus concerning the development of known reserves of natural gas and oil in some of the most contentious areas of the OCS. I believe that the current moratoria have provided the affected parties with a safety net that enabled the consensus-building process to move forward. We believe it is critical for the nation's offshore development plans to be in sync with local communities and states and not to get ahead of the public will."

No offshore leasing is planned in the areas previously under moratoria through June 1997, when the current five-year program for OCS Oil and Gas Leasing expires. A draft of the next five-year program, for July 1997 through June 2002, was to be released for public comment in July. "That plan will define this Administration's movement away from the conflict we inherited towards consensus, which is based on sound science and input from affected parties," said Quarterman.

Eastern Gulf, Alaska included in deferrals

The MMS says it will defer three sales from the 1992-1997 Five-Year Oil and Gas Leasing Program. The sales are Eastern Gulf of Mexico Sale 151, Mid/South Atlantic Sale 164, and St George Basin Sale 153 located west of Alaska in the Bering Sea, southeast of the Pribilof Islands.

Cynthia Quarterman, MMS director explained that the Eastern Gulf of Mexico and Mid and South Atlantic areas have been subject to continuing, annual congressional pre-leasing and leasing moratoria. She said there is insufficient time remaining to start and complete the 2-3 year consultation, environmental review and decision-making process required prior to holding a sale before the current Five-Year Program expires.

MMS received no nominations in response to a request for comments for the St George's Basin Sale in April 1992. Of the seven comments received, only one was from an oil and gas company and it expressed no interest in the area due to very low hydrocarbon resource estimates. Since then, industry interest has continued to remain low.

Briefs...

Seagull Energy announced it has made a natural gas discovery in the Gulf of Mexico at Galveston 362, offshore Texas. The productive zone tested 8.2 MMcf/d of gas and 96 b/d of condensate with a flowing tubing pressure of 2,131 psi through a 26/64-inch choke. Seagull owns 100%.
Global Natural Resources has initiated gas sales from its recent discovery well, High Island 22L-1. Since gas sales were initiated within 18 months of the Texas state lease sale (March 1994), GNR has earned a reduced royalty of 20%. The well was brought on line with an initial daily rate of 10.3 MMcf/d of gas and 117 b/d of condensate. It is producing from a freestanding caisson in 39 ft of water.
Tatham Offshore says an evaluation of its initial well on Viosca Knoll 818 shows the pay zone lacks commercial reservoir characteristics. The well was a test of the Phar Lap Deep prospect. It was drilled to 19,500 ft. Perforations were made in the UVIG zone at approximately 14,000 ft. Several possible pays in the deeper portions of the well will be evaluated at a future point."
Tatham Offshore and its affiliate, Leviathan Gas Pipeline partners, are moving ahead with development of three Flexure trend properties-Phar Lap Shallow (Viosca Knoll 817), Spectacular Bid (Garden Banks 72), and Spend A Buck (Garden Banks 117).
Kerr-McGee says reserves on a prospect covering South Timbalier 265, 266, and 278 are estimated to exceed 140 billion cu ft of gas. Development is underway toward initial production in the third quarter 1996. Kerr-McGee has 100 percent interest.
Aker Omega completed work on the Seastar development project for Phillips Petroleum. The project is a 760-ft deep, multi-well subsea manifold development located in Garden Banks 70/71. Subsea systems installed include 10,000-psi trees, flowlines, electrohydraulic controls, and a manifold system for up to four satellite wells. Gas production is commingled at the manifold and routed through dual piggable flowlines to the host production platform, located 13 miles away in 305 ft of water.