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Big Oil Going Big In The Gulf Of Mexico
Big Oil Going Big In The Gulf Of Mexico.
The oil industry is betting big on the Gulf of Mexico with both costs and production rising as a result.
The Gulf has seen a bit of a resurgence in production this year, after declining from a peak in 2009. The oil industry extracted 1.7 million barrels per day on average in the summer of 2009, which fell to 1.2 million barrels per day last year (see chart. Data from EIA).
But oil output is up around 15% since then, as the industry pours billions of dollars into the Gulf. The Wall Street Journal reported that several new projects from Royal Dutch Shell, Hess Corporation, ExxonMobil and Chevron are expected to come online before the end of 2015 and will have a combined production capacity of 900,000 barrels per day.
The production gains come with high price tags. Since 2010, deepwater wells have seen costs balloon by 25%, according to the WSJ. The average deepwater well can cost $300 million. Even worse, costs are rising by 5 to 10 percent each year.
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Gulf of Mexico Crude Oil and Gas Production – Peak Oil BarrelPeak Oil Barrel
Gulf of Mexico Crude Oil and Gas Production – Peak Oil BarrelPeak Oil Barrel.
BOEM and BSEE have published in 2014 the GOM oil & gas reserves at end 2010 few months ago and at end 2011 lately.
The big change is that they now report proved and probable reserves = 2P (in contrary to SEC rules for operators reporting at the US Stock Exchange, forbidding to report probable reserves), when before they reported only proved reserves = 1P
They argue:
In order to more closely align BOEM GOM reserves definitions with the Petroleum Resources Management System definitions (SPE/AAPG/WPC/SPEE 2007), this report clarifies that Proved Reserves in this and previous reports are Proved plus Probable (2P) estimates.
The difference between original reserves estimates from previous year found little difference for discoveries before 1995
The difference between 2P 2011 and 2P 2010 is a very large decrease for Thunder Horse (-488 Mb or 573 Mboe) and the largest increase is Great White +73 Mb
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Fallout plume of submerged oil from Deepwater Horizon
Fallout plume of submerged oil from Deepwater Horizon.
Abstract
The sinking of the Deepwater Horizon in the Gulf of Mexico led to uncontrolled emission of oil to the ocean, with an official government estimate of ∼5.0 million barrels released. Among the pressing uncertainties surrounding this event is the fate of ∼2 million barrels of submerged oil thought to have been trapped in deep-ocean intrusion layers at depths of ∼1,000–1,300 m. Here we use chemical distributions of hydrocarbons in >3,000 sediment samples from 534 locations to describe a footprint of oil deposited on the deep-ocean floor. Using a recalcitrant biomarker of crude oil, 17α(H),21β(H)-hopane (hopane), we have identified a 3,200-km2 region around the Macondo Well contaminated by ∼1.8 ± 1.0 × 106 g of excess hopane. Based on spatial, chemical, oceanographic, and mass balance considerations, we calculate that this contamination represents 4–31% of the oil sequestered in the deep ocean. The pattern of contamination points to deep-ocean intrusion layers as the source and is most consistent with dual modes of deposition: a “bathtub ring” formed from an oil-rich layer of water impinging laterally upon the continental slope (at a depth of ∼900–1,300 m) and a higher-flux “fallout plume” where suspended oil particles sank to underlying sediment (at a depth of ∼1,300–1,700 m). We also suggest that a significant quantity of oil was deposited on the ocean floor outside this area but so far has evaded detection because of its heterogeneous spatial distribution.
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