The US deepwater Gulf of Mexico is to achieve a comeback in 2018 after years of hardship, according to a Wood Mackenzie prediction.
With the deepwater sector struggling since the fall in crude oil in 2014, the Gulf of Mexico has been particularly badly hit.
However, a new report by Wood Mackenzie says 2018 may bring a marked change in the fortunes.
William Turner, Wood Mackenzie’s senior research analyst, said: “Although deepwater Gulf of Mexico has taken quite a beating over the last three years, the industry has clawed its way back to being competitive by significantly cutting costs, improving efficiencies and tightening up the supply chain.
“2018 will be a forward looking year for the sector as it lays the foundation for longer term resurgence in 2019 and beyond.”
The report, entitled Deepwater GoM: 5 Things to Look for in 2018, claims that oil and gas production in the Gulf of Mexico is expected to reach an “all-time record high in 2018” with a predicted 10% rise on 2009, the previous year of record.
While exploration is expected to remain flat, 2018 is being touted by Wood Mackenzie as a bumper year for the area.
Mr Turner added: “The current production growth in the Gulf of Mexico cannot be sustained with conventional deepwater fields. Increased investments in exploration and development, especially in ultra high-pressure high-temperature technologies and projects, are crucial not only to maintaining the current pace of production but also in unlocking the next phase of significant volumes in the region.
“Moreover, policy incentives specific to ultra high-pressure deepwater developments, which require longer lead times than conventional fields, will be crucial in making these volumes competitive against other more attractive reservoirs in Brazil and Mexico.”
