Sunday, March 30, 1997

Gulf oil production could double by 2000

By WILLIAM GARLAND

Harte-Hanks Washington Bureau

WASHINGTON - Gulf of Mexico oil production, spurred by greater access to deepwater fields, could double by the year 2000 compared to output in 1995, according to latest figures from the U.S. Minerals Management Service.

MMS credited deepwater drilling, now taking place at record depths of more than 4,000 feet of water, as one of the major factors in "the revitalization of exploration and development in the Gulf of Mexico."

"The most conservative projections are that oil production will increase 50 percent, to 1.45 million barrels per day," said MMS in its report, "Deepwater in the Gulf of Mexico: America's New Frontier."

The agency said it based its own projections, predicting higher production levels, on estimates prepared by the MMS Gulf of Mexico Region. That office projected "an increase in oil production from .9 million barrels per day in 1995 to as much as 1.7-to-1.9 million barrels per day in 2000."

"A large portion of this additional production will be derived from new deepwater fields," MMS said. "Less dramatic, but still sizable, contributions will be obtained from the development of the newly-discovered subsalt plays."

Natural gas production from the Gulf was projected by MMS to "remain fairly steady or increase from 13.9 billion cubic feet (Bcf) per day to as much as 17.2 Bcf per day."

"During the period 1991-to-1995, the total number of deepwater fields with proven reserves increased more than 50 percent, from 13 to 20 fields. The MMS projects that the number of proved fields will grow another 80 percent by the year 2000 to 36 fields."

If the projections hold, Gulf production could overtake output from Alaska in the near future. The American Petroleum Institute's latest figures showed Alaskan production at 1.38 million barrels per day in February, down 6.4 percent from a year earlier.

Gulf wells have been regularly breaking records for depth. MMS said "Shell's Mars platform, located in 2,940 feet of water, assumed the current deepwater production record when it was installed in 1996."

But the industry has been "rapidly advancing operations." Those include wells "planned for Shell's Ursa prospect at 4,021 feet, Texaco's Fuji prospect at 4,242 feet, Exxon's Diana at 4,657, Shell's Mensa prospect at 5,376 feet and Amoco's Kings Peak prospect at 6,530 . . . In February 1997, Walter Oil and Gas submitted a plan to drill an exploratory well in 7,380 feet of water."

A deepwater discovery by Exxon Corp. in the Alaminos Canyon area in offshore Texas waters has added "to the increasingly buoyant mood" in the Gulf, The Oil Daily reported this month. The well "could be as big as (Exxon's) nearby 100 million barrel Diana prospect."

The Texas offshore well was drilled in 4,795 feet of water "using a moored semisubmersible drilling rig." Alaminos Canyon is about 165 miles south of Galveston.

George J. Gaspar, managing director of oil research at Robert W. Baird & Co., told the publication that Exxon's "announcement continues a trend that deepwater oil discoveries tend to get larger as they get deeper."