In 2001, there were 148 oil rigs in the Gulf of Mexico. Now there are just 90. More rigs are expected to leave and this is expected to accelerate production declines in the Gulf, forcing US gas prices higher.
The Gulf produces about 25% of US oil and gas but oil production fell alarmingly by 19% between 2003 and 2005.
However, the oil rig exodus is expected to be felt hardest in gas exploration, as many of the rigs leaving the region are shallow water “jack-up” rigs used for gas exploration.
According to the Wall Street Journal, many of the easily reached oil reserves in the Gulf of Mexico have already been drilled, while new prospects are being discovered off Africa, the Middle East and China.
