The Anadarko operated Heidelberg field. Image courtesy of Anadarko.

Production in the U.S. Gulf of Mexico will hit a record high in 2017, according to the U.S. Energy Information Administration.

The agency expects crude production in the U.S. Gulf of Mexico (GOM) to hit a record 1.91 million barrels per day in late 2017, even as oil prices remain low.

The EIA projects that GOM production will average 1.63 million bpd in 2016 and 1.79 million bpd in 2017, finally hitting 1.91 million bpd in December 2017.

GOM production is expected to account for 18 percent of total forecast U.S. crude production in 2016 and then grow to 21 percent in 2017.

The agency said production growth in the GOM is tied to less short-term price sensitivity in the play compared to onshore production in the Lower 48.

“However, decreasing profit margins and reduced expectations for a quick oil price recovery have prompted many GOM operators to pull back on future deepwater exploration spending, reduce their active rig fleet by scrapping and stacking older rigs, and restructure or delay drilling rig contracts,” the EIA said.

The number of rigs operating in the Gulf of Mexico has fallen from 50 a year ago to 25 rigs as of February 12, according to Baker Hughes.

Capital spend cuts and rig reductions have added “uncertainty” to the timelines of many GOM projects, with those projects still in the early stages being at the greatest risk for delays of cancellations, the report added.

Eight fields came online in the GOM during 2015 and another four are expected to start producing in 2016, including the Anadarko operated Heidelberg field that started producing in January.

The Shell operated Stones field, the Nobel Energy operated Gunflint field and the Freeport-McMoRan operated Holstein Deep field are also expected to come online this year.


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