Gulf of Mexico is booming again

Jul 29, 1997 02:00 AM

July 14, 1997 Four years ago, the major oil companies sold off many of their leases on the Outer Continental Shelf of the Gulf of Mexico. After having produced more than 11 billion barrels of oil and 130 trillion cubic feet of natural gas, the Gulf of Mexico was dubbed the "Dead Sea." With more than 4,000 production platforms and 19,000 miles of hydrocarbon pipelines, smaller independents moved into the offshore arena. The Gulf of Mexico has contributed 21 % of U.S. domestic oil production and about 30 % of its natural gas.
Suddenly however, it has become the hottest offshore basin in the world and the showplace of offshore energy technology. Two events have combined to create a new frontier out of the U.S. Gulf. First was the discovery of the Mahogany Field in the subsalt area of the Gulf of Mexico which had historically formed the basement of all drilling activity in the Gulf. Since then, 15 additional wells have resulted in five major discoveries.
Until very recently, no seismic technique could penetrate the thick jumbled layers of salt which cover about 50 % of the Gulf of Mexico. New 3-D seismic, along with remarkable advances in computer technology, provides a much finer resolution of what lays under the salt domes of the Gulf of Mexico.
The other development contributing to renewed drilling activity in the Gulf of Mexico is the era of deepwater development. Shell Oil Company, which has been on the leading edge of deepwater development, has several billion-barrel finds in waters up to 250 miles offshore in waters exceeding 2,400 feet. Suddenly, all of the major oil companies are back. More than ten times the number of bids were received for deepwater tracts in the latest Central Gulf of Mexico lease sale than received but two years ago. Drilling rates and the price for offshore support services are suddenly escalating into what appears to be another boom in drilling activity in U.S. waters.

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