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Gulf of Mexico Shallow Water Production Could Boom In Early 2020

Picture of Stonewall Engineering Stonewall Engineering Nov 26, 2019

Oil and Gas Drilling

Figure 1: OCS Facility in the Gulf of Mexico - https://www.flickr.com/photos/usgao/6304012128/

A separation deep and shallow water provinces in the Gulf of Mexico could lead to more drilling, jobs, and profitability for the gulf coast.

With the recent elections now over, more and more oil and gas companies and families are continuing to worry about the future of oil and gas in the south Louisiana region.

BSEE and the Bureau of Ocean Energy Management could be shining new light

But the BSEE and the Bureau of Ocean Energy Management could be shining new light on more opportunity for Louisiana's oil and gas industry to bounce back.

Now, the gulf will be recognized as two separate provinces in regard to drilling and production.

While the deep water segment put up some of its highest production numbers last year, shallow water may be given a chance to reap some of the wells that it has drilled over the past decade.

Learn more about BSEE's Incentive

The BSEE and the Bureau of Ocean Energy Management recently released a report describing the Gulf will now be treated as two separate provinces.

BSEE Director Scott Angelle said.

“There’s a shallow water province and a deep water province,”

“The deep water provinces doing very good.

Last year, we’ve had the highest production we’ve ever had as far as oil production.”

updated discounted rate for the shallow water province

The updated discounted rate for the shallow water province will apply to special case royalty relief applications. This means that the rate will only apply for new wells and production in the region.

BSEE is planning on bringing the same results to the shallow water province - By doing so $20 billion in oil and natural gas resources could be stranded if the trends remain.

Angelle explains:

“We would see a significant decrease in natural gas production, a significant decrease in oil production and a significant decrease in the number of wells drilled,”

"It’s a more specific tailored approach to managing it.

We hope it unlocks investment, allows capitol to be employed, jobs to be created and production to be made available to America.”

Give Companies Higher Return On Investment

Angelle explains this incentive gives companies the chance to have a higher return on their investment - necessary for a rabbit-size reservoir.

“We have an opportunity to manage the shallow water a little different, unlock us some capital, put people to work and create a better, older America”