Following the infamous BP oil spill in the Gulf of Mexico back in 2010, all deepwater drilling in the area was shut down, and the whole sector was sent into chaos. However now, according to GlobalData, drilling in the US Gulf of Mexico is starting to grow again, and may soon reach the levels that it was at before the spill.
The study performed by GlobalData suggests that despite the increased restrictions placed upon oil companies working in the Gulf of Mexico, and the high risks and costs involved in deep-water drilling, companies are increasing operations in the area due to the high oil prices.
In the first quarter of 2012 the US government issued 44 drilling permits for the area, compared to just 74 and 79 for the whole of 2010 and 2011 respectively. This growth will see drilling operations return to pre-2010 levels by the end of the year.
Oil companies are attracted to the Gulf of Mexico mainly due to the stable political environment and clear regulations. Operations in oil fields in other parts of the world are constantly under threat from changing regimes, and local unrest. However in February of this year the US and Mexican governments signed an agreement which set a clear framework for the exploration and extraction of oil in the Gulf.
Major international oil companies dominate deepwater drilling in the Gulf due to the necessity for high technological expertise, the high set up costs, and the potential multi-billion dollar liability rick if anything bad goes wrong. Of the 44 licenses that were granted, BP received 13, and Chevron 14.
By. James Burgess of Oilprice.com