Gulf of Mexico production will account for 21% of U.S. production next year
Production from the Gulf of Mexico is expected to continue growing, despite the current price environment. With eight projects that came online in 2015, four expected in 2016, and two more anticipated for next year, the Energy Information Administration expects U.S. offshore production to continue playing a major role in the country’s output.
Based on EIA projections, the Gulf of Mexico will average production of 1.63 MMBOPD in 2016 and 1.79 MMBOPD in 2017, with a peak of 1.91 MMBOPD in December 2017, despite low oil prices. The production numbers represent 18% of anticipated 2016 production and 21% of total forecast U.S. crude oil production in 2017.
Production in the Gulf has been more resilient to the price downturn due to the large upfront cost of bringing projects online, and the long life of the wells, especially in comparison to onshore horizontal wells. Many offshore producers are starting to cut back on future development, however, saving their capex dollars for existing projects instead.
