Gulf’s $1.5 trillion oil wildcat play marks post-spill drilling 'renaissance'
A six-month drilling moratorium after the Macondo well blew up helped pose the fundamental question of how and why oil companies are drilling at depths where a blowout could occur. But the experience at the Macondo well upon which the Deepwater Horizon sat has also given drillers new insights and experiences in how to deal with future runaway wells in the deepest deeps.
But more critically, growing oil demand in nations like China – the main reason why US gas prices remain high, despite growing output – have driven wildcatters to make huge plays that are now paying off in about 40 percent of new holes – way above the 30 percent global average for new wells.
Test holes show that the so-called Shenandoah Field in the Lower Tertiary could hold nearly a billion barrels of oil, three times original estimates. Fields with names like Hadrian, Moccasin, and Mad Dog may hold an additional 5 billion barrels, or more. All in all, some 15 billion barrels may be summoned from the Lower Tertiary alone, with up to 48 billion barrels of undiscovered oil still out there.
“The deepwater Gulf of Mexico is witnessing an astonishing run of discoveries and hydrocarbon augmentation," Simmons & Co International said in a note to investors in July. "Quite a renaissance from the depths of Macondo.”
According to Bloomberg News, the run is being augmented by new technologies, including innovative seismic gear that can see more clearly through rock, and new rigs that can go so deep that the earth itself could boil water at the tip of the drill.
In two years, twice as many deepwater rigs – 60 – will be operating in the Gulf compared with just before the Deepwater Horizon disaster, and they could be pumping as much as 2 million barrels a day by 2020, according to Wood Mackenzie, Ltd., an industry research firm.