EXPANDING FRONTIER

It is instructive to look back to the earlier deepwater reports (figure 79) and observe the dramatic increases in proved reserves and discovered volumes (which include proved and unproved reserves, resources, and industry-announced discoveries).

Figure 79. Comparison of 2000, 2002, and 2004 deepwater GOM reports: successive increases in deepwater BOE. (Click the image to enlarge)

Many of the discovered volumes in earlier reports have progressed to become proved reserves in subsequent reports.

For example, in the last report, Thunder Horse was in the discovered-volumes category, and in this report its volumes are classified as proved reserves. While both proved reserves and discovered volumes have substantially increased from report to report, the most dramatic increases have occurred in the discovered volumes.

This suggests a bright outlook for future deepwater production, as the less constrained resource and industry-announced volumes move into the reserve category and are produced.

The future of deepwater GOM exploration and production remains very promising. As shown in figure 78, industry is nearing the end of the primary lease term of the exceptional number of leases acquired in 1996 through 1998.

Traditional deepwater minibasin plays are far from mature, as several recent discoveries attest, and new deepwater plays near and even beyond the Sigsbee Escarpment, beneath thick salt canopies, and in lightly explored Paleogene reservoirs show that the deepwater GOM is an expanding frontier.

As shown in figure 57, the immature deepwater creaming curve predicts that numerous large undiscovered fields remain. The 2000 Assessment indicates that more than 50 billion recoverable BOE remain to be discovered (Lore et al., 2001).

The deepwater arena has made great strides in the last few years, establishing itself as an expanding frontier. The previous edition of this report (Baud et al., 2002) documented the advancements made in deepwater exploration and development since 1974.

Several notable changes have occurred in the deepwater GOM since the last report.

• The deepwater frontier is now in water depths greater than 7,000 ft (2,134 m).
• The first exploratory well was drilled in over 10,000-ft (3,048-m) water depth.
• The first deepwater well was drilled below 30,000-ft (9,144-m) depth (true vertical depth).
• Eleven discoveries were found in over 7,000-ft (2,134-m) water depths.
• The deepest production increased from approximately 5,300-ft (1,615-m) water depth (Mensa) to over 7,000-ft (2,134-m) water depth (Camden Hills).
• The first deepwater discoveries in the Eastern GOM were found.
• There were significant new discoveries in both Walker Ridge and Alaminos Canyon in older, lightly tested Paleogene reservoirs.
• Industry has made great technological achievements (e.g., polyester mooring, composite riser, cell spars, and 15,000-psi subsea trees).
• Loop currents have been recognized as posing significant design challenges for deepwater structures, rigs, and pipelines.
• The average number of operating rigs is down 29 percent and the number of wells drilled is down 37 percent.
• Average bid amounts per block have stabilized or decreased slightly.
• There was a 51 percent increase in the number of producing deepwater projects.
• Nonmajor companies have made more deepwater discoveries and hold more deepwater acreage than the major companies.
• Deepwater production rose more than 100 MBOPD and 400 MMCFPD each year since 1997.
• Subsea gas production has increased 90 percent since December 2000.