Deepwater activity still robust despite shale

February was a busy month in the deepwater Gulf of Mexico.

Early in the month, Shell began production from its Mars B development, the second field in the Mars Basin. The development, producing through the new Olympus platform, is the first deepwater project in the GOM to expand an existing oil and gas field with significant new infrastructure. The new production should extend the life of the greater Mars basin to 2050 or beyond. Combined production from the original Mars platform and the new Olympus facility is expected to total an estimated 1 billion barrels of oil equivalent (BOE).

In addition to the Olympus drilling and production platform, the Shell Mars B development includes subsea wells at the West Boreas and South Deimos fields, export pipelines and a shallow-water platform located at West Delta 143 near the Louisiana coast.

BP wrapped up the end of the month with the announcement of first production from Na Kika Phase 3 in the deepwater GOM. The project supports production at four BP-operated hubs in deepwater. The project includes drilling and completion of two new wells, the addition of subsea infrastructure to tieback to the Na Kika platform and new equipment to allow increased production from an existing well at the site. The Na Kika semisubmersible platform is located about 140 miles southeast of New Orleans in over 6,000′ of water. Shell and BP are partners in both Mars and Na Kika.

Overall, deepwater activity in the Gulf of Mexico remains robust despite the proliferation of lower-cost oil and gas production in onshore shale plays. Plans show that activity in the deepwater GOM should remain relatively stable through the rest of the year. There’s Shell’s continued work on the Cardamom development, which should come on stream this year, and the Stones development currently underway after approval last May.

However, as the shale production expansion continues, deepwater developments in the planning and early design stages may be postponed or shelved as has recently happened with BP’s Mad Dog 2 and ExxonMobil’s Hadrian projects.

About the author

Dr. William J. Pike

Dr. William J. Pike has 45 years experience in the upstream oil and gas industry, including more than 20 years in oil and gas drilling and production operations, both onshore and offshore. He has worked in the U.S., Canada, Britain, Europe and Russia as a technical and economic advisor to the energy industries and various governmental agencies. Pike was editor-in-chief and editorial director for Hart Energy Publishing’s E&P magazine and was also the editor of the Journal of Petroleum Technology, the official publication of the Society of Petroleum Engineers. He holds a doctorate in energy economics from the University of Aberdeen in Scotland.

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