Matthew Rigdon, Executive VP and COO

As the world continues marching down the road towards net-zero carbon emissions, the US Gulf of Mexico continues to be a leading and growing oil and gas production basin. The cost of renewable energy development, low profit margins on renewable energy, and the cost of carbon emission offsets requires significant cash flow which must come from conventional oil production. Additionally, the total environmental impact of drilling is a critical factor in where to produce incremental oil and gas. The US GOM remains one of the most “green” production basins in the world due to the amount and quality of existing infrastructure. It’s no surprise that Super Major oil and gas companies continue to invest heavily in our Gulf. 

BP has just executed a new contract with a deepwater drillship that will begin exploration in the US GOM by end of Q3 2023. The drillship’s intended mission is to develop additional wells on existing fields already in production to boost output from those assets. BP has an objective to increase US GOM production to 400,000 bbls per day. In order to achieve this, there will likely need to be development of new offshore assets which will lead to more exploration drilling.

BP is not the only company that is looking to increase production in the US GOM. Shell recently partnered with Equinor, obtaining a 51% operating stake in a possible new development called Sparta. Though the Final Investment Decision (FID) has not been made, according to reports, Shell is making significant progress in finalizing development plans that could allow this deal to move forward. Shell is apparently drawing on its experience with the Whale and Vito semi-submersible production hubs in designing plans for Sparta.

Though the transition to net-zero carbon is critical for many reasons, the US GOM will remain one of the foremost offshore oil and gas producing reasons in order to allow energy companies to support the financial costs of the energy transition.