Drilling comeback in the Gulf of Mexico? Not exactly
posted at 8:36 pm on October 3, 2011 by Tina Korbe
News reports to the contrary, drilling in the Gulf of Mexico still hasn’t staged a full comeback from the Deepwater Horizon oil spill and subsequent drilling moratorium, according to new research by Quest Offshore Resources, Inc.
Quest’s new analysis shows the number of floating rigs in the Gulf is down 37 percent from its pre-moratorium level. At the moment, just 21 floating rigs are operating in the GOM — and, of those, just 18 are actually drilling wells. Before the moratorium, 33 rigs were operational and 29 of those were actively drilling wells. Thanks to the moratorium, 11 rigs left the Gulf and just one has returned. The loss of those rigs translates into nearly 12,000 jobs lost.
Production levels, too, have suffered:
In 2010, companies produced about 1.54 million barrels of oil a day from the Gulf, according to the Bureau of Ocean Energy Management.
A moratorium on deep-water drilling put in place in May 2010 and officially lifted in October hurt production. The U.S. will produce 1.43 million barrels of oil a day from the Gulf’s federal waters in 2011, according to projections from the Energy Information Administration. That’s 13.5% less than the 1.65 million barrels a day that the agency expected to produce this year in an estimate calculated just before the Deepwater spill.
Meanwhile, government permitting continues to lag. The rig count in the Gulf is expected to return to pre-moratorium levels by the middle of 2012, but that still won’t automatically equate to pre-moratorium activity or production levels. None of this detracts from the news of recent, significant oil discoveries, which will help to boost production levels again. But it does serve as an important reminder that the Gulf still has a long way to go. The facts also should help to ensure credit for the discoveries goes to the companies responsible for the finds and not to a government that has only grudgingly allowed activity to resume at all — a government that, even now, seeks to tighten government oversight of offshore drilling.
Breaking on Hot Air