The Trump administration is looking into the possibility of extending the lengths of tiebacks in the Gulf of Mexico to allow operators to connect more wells to existing oil and gas platforms, the director of the Bureau of Safety and Environmental Enforcement (BSEE) , Scott Angelle, told Reuters.
The BSEE is currently reviewing the policy that limits the length of tiebacks to 25 – 30 miles of existing offshore platforms, Angelle said.
The agency is investigating whether there could be “a policy change that could make subsea tiebacks and investment in the Gulf of Mexico bigger, broader and braver for the next decade,” the BSEE director told Reuters.
The agency also assesses if platforms in the Gulf of Mexico are being used to their full potential, the official said, noting that “The last thing we want to do is own the property of the American people who have been stranded and left behind. . “
The Gulf of Mexico saw its crude oil production hit a record high last year, at an annual average of 1,897 million tonnes per day (bpd), according to EIA data. The monthly production record was 2,045 million bpd in August 2019. Following the price crash in March and April this year, the production of raw oil from the Gulf of Mexico dropped to 1.613 million bpd in May 2020, according to the latest available EIA data.
The Gulf of Mexico is now better prepared to weather the oil crisis than it was in the 2015-2016 downturn, as 82 percent of oil production has marginal costs in the short term – operating costs, taxes and royalties – of US $ 10 a barrel Brent, Wood Mackenzie said in June this year.
The Gulf of Mexico is now more sober and leaner and farther, the consulting firm said in research.
Despite the lower costs and leased operations compared to the previous crisis, the Gulf of Mexico will not remain unaffected by this year’s prize money as companies cut budgets and recalibrate plans for reconnaissance and sanctions. According to WoodMac, capital expenditures (capex) by Gulf of Mexico operators are expected to fall to US $ 7.4 billion this year, up 22 percent or US $ 4 billion from 2019 onwards.
By Charles Kennedy for Oilprice.com
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