Gasoline prices have ticked up…
The exports of OPEC’s second-largest…
The largest oil companies have significantly raised their share of crude oil production in the U.S. Gulf of Mexico in recent years, while smaller firms have been weighed down by the pandemic and the suspension of licensing for drilling in federal waters, executives and analysts tell Reuters.
The merger and acquisition wave in the U.S. oil and gas industry has not been limited to the shale patch in recent months and years. The Gulf of Mexico has seen Big Oil pump a growing share of crude from the offshore region compared to just a few years ago.
The ten biggest producers in the U.S. Gulf of Mexico have produced as much as 86 percent of the average 1.6 million barrels per day (bpd) pumped in the area so far this year, according to Reuters estimates based on data from the Bureau of Safety and Environmental Enforcement (BSEE). Back in 2017, this percentage was around 75 percent.
Some smaller producers filed for bankruptcy after the markets crashed in 2020, while new investors are hesitant because of the moratorium on oil drilling licensing in federal waters and on federal land, which the Biden Administration introduced earlier this year.
The halt in the offshore oil auctions “has certainly chilled any potential investors,” Michael Minarovic, chief executive officer at privately-held Arena Energy, told Reuters.
Arena Energy has just emerged from bankruptcy, for which it filed last year.
Meanwhile, the top dogs, including supermajors BP, Shell, and Chevron, are boosting their activities in the Gulf of Mexico.
Chevron is preparing to drill at a super-high pressure field. Royal Dutch Shell announced last month the go-ahead of its Whale deepwater project in the Gulf of Mexico, its 12th project in the region. Shell is a leading deepwater oil and gas producer in the Gulf of Mexico, producing 150 million barrels of oil equivalent per year—which is about half of Shell’s total U.S. oil and gas production.
A month earlier, BP said it had started up the Manuel project, which includes a new subsea production system for two new wells tied into the Na Kika platform 140 miles off the coast of New Orleans. BP and Shell each hold a 50-percent working interest in the Manuel development.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
The USA continues to be flooded with product of every kind but in particular energy product yes, absolutely and yes even at these elevated prices very much still *DIRT CHEAP* absolutely.