Activity in what has been a mostly sluggish US Gulf of Mexico is expected to increase modestly in 2019, bringing production growth and more exploration aimed at finding the elephant fields of the future. Brent crude has fallen $20 from highs in the mid-$80s/b months ago, but US Gulf operators, especially in deepwater, aren’t phased by volatile prices, analysts say. Instead, operators are deciding to grow in the gulf because of the industry’s increasing ability to make those fields more economic. Logistical and operational efficiencies, lower oilfield service costs, scaled designs and better engineering have combined to make the region more profitable than it was even before the 2014 industry downturn. “Generally, when industry is at peak efficiency and operating at its best, industry fundamentals aren’t bad and oilfield costs are relatively low,” said William Turner, a Gulf of Mexico analyst at energy consultancy Wood Mackenzie. 2019 will mark the first increase in US Gulf exploration in four years, Turner said. About 21 or 22 exploration and appraisal wells are expected this year in the US Gulf, up from 19 last year, according to Wood Mac. That compares with 40-50 wells drilled three or four years ago. The increase is… continue reading
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Source: CTRM Center