CHALLENGES AND REWARDS

Significant challenges exist in deepwater in addition to environmental considerations.

Deepwater operations are very expensive and often require significant amounts of time between the initial exploration and first production.

Despite these challenges, deepwater operators often reap great rewards.

Figure 16 shows the history of discoveries in the deepwater GOM.

Figure 16. Deepwater discoveries in the Gulf of Mexico.

There was a shift toward deeper water over time, and the number of deepwater discoveries continues at a steady pace. Note that the last frame of this figure only represents a 3-year span and that several recent discoveries are not shown in this frame because they have not been assigned a discovery date yet. (The Reserves and Production section of this report explains how discovery dates are assigned.)

Figure 17 shows how major and nonmajor oil and gas companies compare in terms of deepwater project discoveries. (Appendix E lists those companies defined as majors.) In the past, major companies were responsible for the majority of discoveries and led the way into the deepest waters.

Figure 17. Ownership of deepwater discoveries (includes industry-announced discoveries). (Click image to enlarge)

However, the number of discoveries by nonmajor companies has surpassed that by major companies. In addition, nonmajor companies have made numerous recent discoveries in the deepest waters of the frontier.

In addition to the significant number of deepwater discoveries, the flow rates of deepwater wells and the field sizes of deepwater discoveries are often quite large. These factors are critical to the economic success of deepwater development.

Figure 18 illustrates the estimated sizes and distributions of 80 proved deepwater fields.

Figure 18. Estimated volumes of 80 proved deepwater fields. (Click image to enlarge)

In addition to their large sizes, deepwater fields have a wide geographic distribution and range in geologic age from Pleistocene through Paleocene. Note that only recently have reservoirs older than Miocene been encountered.

The growing number of large deepwater fields on production requires increasing support from onshore service bases. Most producing deepwater fields have service bases in southeast Louisiana (figure 19).

Figure 19. Onshore service bases for existing deepwater structures. (Click image to enlarge)

Pending exploration plans (EP�s) and development operations coordination documents (DOCD�s) filed with MMS indicate that support from southeastern Louisiana will continue to grow and that additional support will come from southwest Louisiana, Mississippi, and the Texas coast (figure 20).

Figure 20. Onshore service bases for pending deepwater plans. (Click image to enlarge)

Although expanding along the Gulf Coast, shore-based support for deepwater operations is likely to remain concentrated in southeastern Louisiana.

Figure 21 illustrates existing and potential hubs for deepwater production.

Figure 21. Current, potential, and future hub facilities in the Gulf of Mexico. (Click image to enlarge)

For purposes of this report, deepwater hubs are defined as surface structures that host production from one or more subsea projects.

These hubs represent the first location where subsea production surfaces and the connection point to the existing pipeline infrastructure.

Note that potential hubs are moving into deeper waters, expanding the infrastructure, and facilitating additional development in the ultra-deepwater frontier.

The infrastructure needed to bring deepwater production online continues to develop over time.

Figure 22 shows the framework of major oil and gas pipelines in the GOM.

Figure 22. Oil and gas pipelines with diameters greater than or equal to 20 inches. (Click image to enlarge)

Figure 23 illustrates the existing network of deepwater pipelines.

Figure 23. Deepwater oil and gas pipelines in the Gulf of Mexico. (Click image to enlarge)

These figures highlight new and proposed pipelines since the last report.

Offshore liquefied natural gas (LNG) terminals may bring significant additional gas into the GOM and may vie for pipeline capacity with future deepwater developments.

Table 3 shows proposed LNG terminals in the GOM.