US GoM output to rise to record in 2017: EIA
OREANDA-NEWS. February 22, 2016. US Gulf of Mexico (GoM) oil output is expected to rise to a record in 2017 with the startup of as many as 14 projects.
Output is expected to average 1.79mn b/d in 2017, rising to 1.91mn b/d in December, from an average of about 1.63mn b/d this year, the US Energy Information Administration (EIA) said. GoM output will account for 18pc and 21pc of the total forecast US production in 2016 and 2017, respectively.
Of the 14 projects, eight started in 2015, four are starting in 2016 and two are expected next year.
Deepwater conventional oil projects are far less sensitive to price swings than onshore operations such as shale because of the fields' longer life spans and the time it takes to develop the discoveries. But a prolonged oil market weakness since the middle of 2014 that has seen prices fall to near 13-year lows is raising a question mark on those that were at early stages of development. Chevron last month said it was deferring its Buckskin-Moccasin project in the GoM.
"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," the EIA said. "These changes added uncertainty to the timelines of many GoM projects, with those in the early stages of development at greatest risk of delay or cancellation."
Key projects that started up in 2015 include Shell's Deimos South, Noble Energy's Big Bend, ExxonMobil's Hadrian South and Anadarko's Lucius.
Those expected this year include Noble Energy's Gunflint, Shell's Stones and Anadarko's Heidelberg, which began producing in January. Freeport-McMoRan's Horn Mountain Deep and LLOC Exploration's Son of Bluto 2 are expected to start in 2017, it said.