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The
NewsRoom
Release: #3199
Date: November 15, 2004
Spurred by Incentives, Oil and Gas
Production in the Gulf of Mexico
Expected to Increase Over the Next Decade
WASHINGTON — New incentives
to encourage energy companies to explore and develop
difficult-to-reach areas of the Gulf of Mexico will help boost peak
oil production in the gulf by 43 percent and natural gas production by
13 percent over the next decade, Assistant Secretary of the Interior
for Land and Minerals Management Rebecca Watson announced today.
“Energy companies are
responding positively to new incentives offered under the President’s
Energy Plan that allow them to tap into pockets of oil and gas in
areas of the gulf that otherwise would not be economical to produce,”
Watson said at a news conference where she released the Minerals
Management Service’s first-ever 10-year energy projections for the
gulf. “For American consumers, this will mean less dependence on
unstable sources of imported energy.”
Oil production in the Gulf
will increase to a record 2 million barrels per day by 2006, compared
to the current rate of 1.5 million barrels per day, and could reach
2.25 million barrels a day by 2011, according to MMS projections. The
projected increase in oil production will provide enough additional
energy to heat 3.5 million new homes.
Since 2001, the
administration has continued incentive programs for deep-water areas
of the gulf and introduced new incentives for other areas. The most
recent incentives announced by Interior Secretary Gale Norton in
January, offer developers royalty relief to tap into pockets of
natural gas deep under shallow waters in the gulf that otherwise would
be too costly and financially risky to attempt.
“The
Gulf of Mexico delivers more oil and gas to the U.S. market than any
single domestic or foreign source, but many older, easier-to-reach
fields have passed their peak. 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,” Watson said. “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.”
“A rise in deep water oil
production is fueling this dramatic increase, and almost 80 percent of
Gulf oil production in 2011 is expected to come from this resource
rich region,” Watson said. “We expect our greatest oil production to
come from the deep water region of the Gulf; while in the case of
natural gas, both the deep-water and the
shallow-water deep shelf hold the most promise.”
MMS Gulf of Mexico Regional
Director, Chris Oynes said, “We are now in the ninth year of sustained
expansion of the deep water frontier in the Gulf of Mexico. It appears
likely that it will expand greatly over the next 10 years as more than
100 development projects have begun production and new discoveries
that have occurred in the last three years will likely be developed.”
The MMS long-range projection of
deep-water projects that industry has indicated they intend to pursue
shows oil production in that region will drive the increase in the
coming years. After these projects reach their production peaks, MMS
believes that the anticipated 2 million barrels of oil per day level
can be maintained if operators commit to developing existing
discoveries and continue to explore the deep water frontier. In 2003,
operators announced 13 discoveries in deep water and have announced
another 10 so far this year.
Gas production in the Gulf
is expected to show some decline in the short-term as old fields begin
to be exhausted and then to show an increase again as new wells in
deep-shelf and deep-water areas come into production. Projections
show that natural gas production will rebound beginning in 2008 and
will reach more than 13 billion cubic feet per day in 2011.
Gulf of Mexico natural gas
production is slightly more than 12 billion cubic feet per day. The
Minerals Management Service forecasts that total Gulf natural gas
production levels will decrease slightly by 2007 to just over 11
billion cubic feet per day. However, MMS projections show that
natural gas production will rebound beginning in 2008 and will reach
more than 13 billion cubic feet per day in 2011.
This year’s production estimate by
MMS is based on a new methodology. In addition to surveying oil and
gas companies, MMS analyzed recent deep water discoveries and
projected deep-water reserves. This method enabled MMS to forecast
Gulf production 10 years into the future instead of the previous
standard five-year projection.
“Our quality of life and economic
security is dependant on a stable and abundant supply of affordable
energy,” Watson said. “By carefully integrating energy and
environmental policy we can encourage the production and development
of energy sources offshore and on our public lands to help meet those
needs while protecting the environment.”
The 10-year production forecast is
available in the new MMS publication
Gulf of Mexico Oil and Gas
Production Forecast: 2004-2013 (MMS OCS Report 2004-065).
Additional information regarding deep-water exploration and
development can be obtained at:
http://www.gomr.mms.gov/homepg/offshore/deepwtr.html.
See the bullets below for additional
information.
The Minerals Management Service is
the federal agency in the U.S. Department of the Interior that manages
the nation’s oil, natural gas, and other mineral resources on the
Outer Continental Shelf in Federal offshore waters. The agency also
collects, accounts for, and disburses mineral revenues from Federal
and American Indian lands. MMS disbursed more than $8 billion
in FY 2003 and more than $143 billion since the agency was created in
1982. Nearly $1 billion from those revenues go into the Land and
Water Conservation Fund annually for the acquisition and development
of state and Federal park and recreation lands.
Relevant Web Sites:
MMS Main Website
Gulf of Mexico Website
Media Contacts:
Curtis Carey (202) 208-3983
MMS: Securing Ocean Energy & Economic Value for
America
U.S. Department of the Interior
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