Oil and gas operations in the deep-water Gulf of Mexico are recovering from the slowdown that followed the 2010 oil spill disaster, and production will exceed pre-spill levels by 2019, according to the energy consulting firm Wood Mackenzie.
The firm projected that Gulf production will top 2 mil-lion barrels of oil equivalent a day before the end of the decade because of significant investment, a wide range of opportunities and large number of explorers -- 46 operators in the deep-water Gulf.
The federal government imposed a five-month moratorium on drilling in the region soon after BP's Macondo well blew out on April 20, 2010, resulting in the destruction of the Deepwater Horizon drilling platform, the deaths of 11 workers and a three-month, 5 million-barrel oil spill.
"The moratorium and exodus of several mobile offshore drilling units from deep-water GoM in 2010 sharply hindered drilling activity through 2011, but it has rebounded very well in 2012," said Lauren Payne, a Gulf analyst for Upstream Research at Wood Mackenzie.
"We expect this trend to continue, driven primarily by development drilling as operators seek to boost production levels and bring new projects onstream."
The region produced roughly 1.8 million barrels of oil equivalent per day prior to the spill, according to the U.S. Energy Information Administration, but the moratorium caused production to drop to around 1.4 million barrels a day now.
Offshore drilling, particularly in the Gulf of Mexico, has become a sticking point between the energy industry and the government.
Industry officials contend a slow permit approval process by the government is causing production to suffer. Regulators say they are working to speed up the process, but want to ensure the process is done thorough and addresses safety and environmental concerns.
Wood Mackenzie said those regulations haven't stopped explorers from investing in the region, and the firm believes that investment will pay off down the line.
"The deep-water Gulf of Mexico will remain an attractive region and will be a vibrant hub in the long term, with more than $70 billion to be spent on exploration in the region by 2030 -- more than all the other key deep-water provinces combined," the firm wrote.
Most Popular Stories
- Desktop, Laptop Setups Still King
- Four DC Comics Properties Brought to TV Get Comic-Con Event
- UFC Fight Night Sees Robbie Lawler Win Unanimous Decision
- Plan to Simplify 2015 Health Renewals May Backfire
- 'Guardians of the Galaxy ' Sequel Slated for 2017
- Shania Twain's Vegas residency ending after 110 shows
- Pending Home Sales Slipped in June
- Nissan Profits Rise on Growth in U.S., China