The Minerals Management Service (MMS) said energy companies were responding to new incentives to explore and develop hard-to-reach areas of the Gulf.
“Exploration has shown more gas can be produced at deeper depths under existing shallow water infrastructure; and oil can be produced at tremendous depths—many miles beneath the Gulf’s surface,” said MMS head Rebecca Watson.
“To help ensure our future energy security, we need to reward developers for the huge risks they take when they explore in deep-water and deep-shelf areas.”
With new deep-water wells due to start producing in the next few years, oil production should rise from 1.5 million barrels a day to 2 million a day by 2006 and it could reach 2.25 million a day by 2011, she said.
Making the agency's first 10-year production forecast, she said peak oil production should rise 43 percent and peak natural gas production 13 percent. But this was comparing current production — depressed by Hurricane Ivan — to estimates for a blue-sky year.
Current oil production is down about 200,000 barrels a day from the usual 1.7 million barrels, and natural gas is down 679 million cubic feet from the usual 12.3 billion, MMS said in a separate announcement.
Comparing peak to peak, rather than to current production, the increase expected by 2011 would be 32 percent and the natural gas increase would be 9.8 percent.
Watson said that by 2011, deep-water oil is expected to supply almost 80% of the total extracted from the Gulf of Mexico, where shallow-water fields are empty or playing out.
Meanwhile BHP Billiton has said the oil find at its Shenzi field in deep water in the Gulf of Mexico supported its decision to build a third core oil and gas province in the region to stand alongside Bass Strait and the North-West Shelf joint venture. Production from the Gulf is expected to offset declining output from its Australian interests.
BHP Billiton said yesterday its Shenzi-3 well struck 100 metres of net oil pay in a 125 metre hydrocarbon column.
Shenzi is located on the same geological trend as the Mad Dog, Atlantis and Neptune fields in which BHP also holds stakes.
The BP-operated Mad Dog is due to start production by the end of this year and the Atlantis field, also operated by BP, is scheduled to start in the third quarter of 2006. Neptune should operating by mid- 2007, with Shenzi starting up after that.
