The US Gulf of Mexico is mature and on a slide that can only be reversed through a concerted effort by the industry backed by sufficient fiscal and other incentives to turn the tide.
And that will have to be coupled with an incredible run of exploration luck followed immediately by fast-track development.
Output from this energy province peaked at a little over 1.7million barrels per day in mid-2002 and has since declined at an average rate of about 3.5%, a proportion of which can be pinned on major output disruptions due to hurricanes such as Katrina.
There is talk of that decline gradually accelerating and, according to the International Energy Agency (IEA), much steeper falls can be expected from mature fields – as much as 20% per annum in some instance.
Like the UK North Sea, reversing decline seems to be a tall order, with insufficient large finds in the hopper for development near-term or too long a development time horizon to have a near to medium-term impact. Chevron’s ultra-deepwater Jack discovery, reputed to be some 15billion barrels, fits the latter description as it may not be onstream until 2015 earliest. That said, for the time being at least, BP would appear to be able to apply the brakes to the decline of the past few years by stepping up output from its Thunder Horse asset to 300,000 barrels per day, compared with some 200,000bpd in December, 2008. It remains to be seen how long BP can sustain such levels of production before GoM decline reasserts itself. The original capacity of Thunder Horse was 250,000bpd, but it has been uprated significantly.
Other developments, such as Blind Faith and Neptune, which also came onstream last year, have added further significant production capacity – some 100,000bpd – and the star additions this year (2009) are scheduled to include: Tahiti, 125,000bpd (Chevron); Shenzi, 100,000bpd (BHP Billiton) and Thunder Hawk, 60,000bpd (Murphy). Shenzi started producing in March.