U.S. Gulf outlook is strong

Despite another blowout in the U.S. Gulf of Mexico (GOM), prospects for increased activity offshore continue to brighten. Several recent announcements should boost the enthusiasm of offshore service vessel owners and operators in the Gulf:

• In July, Shell announced the award of a contract to SBM Offshore to supply a floating production, storage and offloading vessel for the Stones development project in the GOM. The 10-year contract, with a 20-year extension option, is worth approximately $1 billion. The Stones development, located in 9,500′ of water in Walker Ridge Block 508, will be the world’s deepest FPSO development.

• Also in July, the OCS Governors Coalition, a group of eight governors from coastal states, offered five recommendations to boost offshore drilling in the GOM and Atlantic Ocean. At the top of their list was the expansion of an existing program for sharing offshore revenue with coastal states adjacent to offshore development activity. The group also endorsed plans to expand access to new areas of the OCS, especially offshore Virginia, Alaska and Southern California, which were not included in planned lease sales announced by the Bureau of Ocean Energy Management.

• Five new floating drilling units are scheduled to begin work in the GOM in the second half of this year, with an additional 12 expected to begin drilling in 2014. The additions could increase the GOM floating rig count to 60 by 2015, up from 37 last month. 

These positive developments may be tempered slightly by the recent landmark agreement by the oil and gas industry to stop seismic acquisition activity in the Gulf of Mexico for the next two-and-a-half years in three areas considered critical to whales, and along the coast during the peak calving season for bottlenose dolphins. 

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