Over the past few years, I’ve commented that the projected demise of oil and gas as fuels (as a result of renewables) was greatly exaggerated. The very aggressive goals to achieve net-zero carbon emissions within the next few decades has seemed unsustainable ever since those goals were first announced by major oil and energy companies. There is recent acknowledgment among many stakeholders, perhaps not due to new realizations, that these goals may indeed be unsustainable. What we do know, is that we are hearing a lot about oil and gas remaining a critical component of the “energy” mix for decades to come. More importantly, the need to produce oil and gas with the lowest possible carbon footprint will drive more activity to basins, such as the US Gulf of Mexico, where oil and gas can be produced more efficiently and with less emissions. This is certainly supported by Shell’s recent announcement of a planned long-term commitment to the US Gulf of Mexico for oil and gas production.
During the annual Offshore Technology Conference on August 16th, Shell announced this long-term strategy as it works to support the broader energy transition. One major part of this strategy includes continued exploration and and production in the US GOM due to its advantageous low carbon position relative to other basins. With the higher pressure of oil reservoirs in the US GOM, less pressure is needed for production and carbon emitting inputs are greatly reduced. The long-term commitment to the US GOM as a part of their energy mix optimization results in Shell planning on drilling 25 to 28 additional wells in the US GOM over the next three years.
The US GOM will remain a critical offshore oil and gas basin for years to come and we can expect to see the Super Major oil companies remain committed to the region.