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May 14, 2008

Oil Producers Head to Deep Water in the Gulf of Mexico

As oil prices continue to hit new record highs, a new report from the Interior Department's Minerals Management Service (MMS) documents a steady advance of oil producers into deeper waters in the Gulf of Mexico. The report, "Deepwater Gulf of Mexico 2008: America's Offshore Energy Frontier," notes that 72% of the Gulf oil production is now coming from wells drilled in 1,000 feet or more of water. Ten deepwater wells started production in 2006 and another 15 started production in 2007. And of 48 development wells drilled in 2007, 60% were in "ultra-deep water," which is defined as water depths greater than 5,000 feet. Eight new deepwater discoveries were announced in 2007, three of which were in ultra-deep water, with the deepest located in 7,400 feet of water. See the MMS press release and the full report (PDF 9.1 MB). Download Adobe Reader.

How will these deepwater facilities cope with hurricanes? Petrobas, a Brazilian oil company, plans to develop a floating oil and natural gas facility that will draw from a well drilled in 8,200 feet of water. The facility will be able to close off its wells and pipelines, disconnect from them, and move out of the path of approaching storms. It will be the first production facility to take advantage of significant oil and gas resources discovered in a geologic region known as the Lower Tertiary trend, which is located in the ultra-deep water of the Gulf. See the MMS press release.

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