SUGAR LAND, Texas--(BUSINESS WIRE)--Researched by Industrial Info Resources --First oil from two major projects in the Gulf of Mexico lifted crude oil production prospects during the first quarter and additional projects could push output to new heights by 2025, data show.
British energy company BP Plc (NYSE:BP) (London, England) started production at the Argos platform situated on top of the Mad Dog 2 prospect in the Gulf of Mexico early this year. First oil marked the first new BP-operated facility in the Gulf since 2008. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can learn more from a detailed project report.
Gross production is expected at 140,000 barrels per day (BBL/d), coming on gradually throughout 2023.
"The semi-submersible platform ultimately will increase BP's gross operated production capacity in the Gulf of Mexico by an estimated 20%," the company said in April.
Shell Plc (NYSE:SHEL) (London, England) got into the game too with the start of operations at Vito, with a semi-submersible platform expected to yield 100,000 BBL/d. Subscribers can read detailed reports on Vito's production platform, which finished construction in February.
Federal data through March show total offshore production in the U.S. territorial waters of the Gulf of Mexico averaged 1.87 million BBL/d. And while that represents only around 15% of total U.S. crude oil production, Gulf production has increased steadily since the 1980s.
Industrial Info finds production is up 150% from 1980s levels and by the 90s, output had reached 750,000 BBL/d.
"We see three new facilities under construction and ready for first oil by 2024," said Gordon Gorrie, Industrial Info's vice president of oil and gas research. "With three additional production platforms getting recent approval, we believe U.S. offshore could come close to 2 million BBL/d by next year."
Gorrie was one of the speakers at Industrial Info's North American Mid-Year Industrial Market Outlook on June 21.
Barring the five-year period after the Deepwater Horizon tragedy, offshore production has shown incremental, but steady, gains. That stability contrasts with inland shale production, where year-on-year increases are on the decline despite record-level output that rivals Saudi Arabia.
Industrial Info sees Chevron and Shell doing much of the work offshore. Chevron is close to adding nearly 100,000 BBL/d to its portfolio, while Shell could boost capacity by 160,000 BBL/d. The bulk of Shell's new output will come from the Whale semi-submersible floating production unit (FPU), where first oil is expected by early 2024. Subscribers can read detailed reports on the Whale FPU and subsea infrastructure.
What's more, these are low-carbon barrels relative to shale. Research from consulting firm McKinsey and Co. finds the Gulf is among the lowest-emitting basins in the world on a per-barrel basis.
In terms of Scope 1 emissions, those coming direct from the source, and Scope 2 emissions, those associated with the use of the products, McKinsey estimates the Gulf releases less than half of the emissions per barrel relative to other major-producing basins.
That matters for companies like BP and Shell, who are under shareholder pressure to clean up their act.
"The startup of Argos is a fantastic achievement that helps deliver our integrated energy strategy -- investing in today's energy system and, at the same time, investing in the energy transition," said BP Chief Executive Officer Bernard Looney.
All told, Industrial Info sees some $82 billion going to North American oil and gas production, provided all projects stay on track. For the Gulf, that capital is a novel spend on the energy transition.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).