Chevron's Jack/St.Malo production facility. Image courtesy of

The U.S. Energy Information Administration said Tuesday it expects production in the Gulf of Mexico to keep rising despite oil price volatility.

The agency projects crude production will hit 1.52 million barrels per day in 2015 and grow to 1.61 million bpd in 2016.

The expected production growth is tied to new projects as well as the redevelopment and expansion of older fields, the EIA said.

In the last three months of 2014 five new deepwater projects started up in the U.S. Gulf of Mexico including the Stone Energy-operated Cardamom Deep and Cardona projects, Chevron-operated Jack/St. Malo fields, Murphy Oil-operated Dalmatian and Hess-operated Tubular Bells.

The agency said the new wave of projects signals renewed interest in the Gulf following a seven month drilling moratorium after the 2010 Deepwater Horizon spill.

“The relatively high number of fields that came online in 2014 and are scheduled for 2015 and 2016 production start-ups reflects the revival of interest and activity in the GOM following the moratorium on deepwater drilling after the 2010 Deepwater Horizon incident,” the EIA said.

The new projects combined with continuing production from projects brought online in late 2014 are expected to add 265,000 bpd to total production by the end of 2015.

However, the EIA said low oil prices could add uncertainty to development timelines for deepwater Gulf of Mexico projects, with projects in the early stages of development being most at risk for delays.

The agency noted that upstream are collaborating to reduce delay risk and to make projects more cost-effective.


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