Technological advances unlock deepwater reserves (Reuters).
Offshore oil production gains momentum as onshore drilling slows. “We believe that offshore production will play an increasingly larger role in filling the global energy demand,” said Paul Goodfellow, chief executive officer of U.S. offshore producer Talos Energy.
“Questions are starting to arise about the continued long-term economic viability of onshore basins… At the same time, technological advancements have unlocked significant deepwater reserves,” he added.
Offshore production accounts for about 15% of total U.S. output and is likely to drive growth for the U.S. oil industry this year. Initial investment costs offshore may be high, but Talos said break-even prices can dip as low as $20 per barrel, compared to an average of about $48 onshore. Break-even costs per barrel rise once dividends, debt payments and other expenses are included.
Talos said its offshore drilling projects for the second half of 2025 remain economically attractive at an average oil price of about $35 per barrel.
The U.S. Energy Information Administration projected U.S. Gulf of Mexico output will rise by 100,000 barrels per day to 1.89 million bpd in 2025 after dropping by 70,000 bpd last year.
Output is set to climb to 1.96 million bpd in 2026. In October, the agency raised its forecast for crude oil production in the region it calls the Gulf of America, citing a faster-than-expected ramp up of production.
Onshore production is estimated to decline to 11.10 million bpd in 2026.
In April, the U.S. Interior Department boosted estimated oil and gas reserves in the Gulf of Mexico, which it calls the Gulf of America, by 1.30 billion barrels of oil equivalent (boe) over its 2021 estimate, bringing the total reserve estimate to 7.04 billion boe.
“High-pressure drilling technology allows us to reach new depths and unlock access to resources that were once unreachable,” Chevron said, adding that 20% of its exploration opportunities in the Gulf could utilize 20,000 psi technology.
Technologies that can safely tap ultra-high pressure fields could put up to 5 billion barrels of previously inaccessible crude into production
Improved drilling to boost Gulf of Mexico offshore oil output as US onshore growth slows.
/Reuters/