By Jennifer Larino
Deflated oil prices are forcing companies to shut down drilling rigs in North Dakota and Texas, taking jobs with them as they go. Analysts say the industry outlook is less gloomy for Gulf of Mexico oilfields off the Louisiana coast.
At least for now.
Gulf operators are gearing up for a surge in production this year. Oil output from federal waters is expected to hit 1.55 million barrels per day in 2015, on par with the region’s 2009 historic high, according to government estimates. Production is expected to jump to 1.65 million in 2016.
Chevron started production in December at its $7.5 billion Jack/St. Malo floating platform in the deepwater Gulf of Mexico, one of the largest platforms of its kind.
Meanwhile, Port Fourchon, a hub for Louisiana’s offshore industry, is in the middle of a multimillion-dollar expansion to keep pace with all the activity.
By all appearances, work in the Gulf is ramping up in spite of prices hovering at $50 per barrel, said Sean Shafer, an analyst with Quest Offshore, a Houston oil and gas industry research firm. That’s because drilling in the deepwater Gulf of Mexico is costly and requires years of planning, Shafer said, and the growth in production now is coming from projects that have been in the works for several years.Read more