The Gulf of Mexico is set to top peak production by 2019 after high level of investment and successful projects have spurred a resurgence, according to the energy consulting firm Wood Mackenzie.
The firm said the area is expected to top 2 million barrels of oil equivalent a day by 2019, and the region is currently being defined by large investments, wide range of opportunities and large number of explorers.
“The moratorium and exodus of several mobile offshore drilling units from deep-water GoM in 2010 sharply hindered drilling activity through 2011, but it has rebounded very well in 2012,” said Lauren Payne, a Gulf analyst for Upstream Research at the firm. “We expect this trend to continue, driven primarily by development drilling as operators seek to boost production levels and bring new projects on stream.”
The Gulf region produced roughly 1.8 million barrels of oil per day prior to the Deepwater Horizon disaster, but a subsequent drilling moratorium caused production to drop in the region.
Production is now around 1.4 million barrels of oil a day.
Offshore drilling, particularly in the Gulf of Mexico, has become a sticking point between the energy industry and the government. Industry officials claim a slow approval process by the government is causing production to suffer.
The government claims it is working to speed up the process, but officials want to ensure the process is done safely without any undue risks.
Wood Mackenzie said those regulations haven’t stopped explorers from investing in the region, and the firm believes that investment will pay off down the line.
“The deep-water Gulf of Mexico will remain an attractive region and will be a vibrant hub in the long term, with more than $70 billion to be spent on exploration in the region by 2030 – more than all the other key deep-water provinces combined,” the firm wrote.