Comments: State of the Gulf

Editor's column

The mood at last month’s Offshore Technology Conference in Houston was decidedly upbeat compared with 2010, when the Deepwater Horizon accident had taken place in the US Gulf of Mexico only days before the conference. But the explosion and its consequences dominated discussion at this year’s conference, from improvements in blowout preventers to panel discussions involving company and government officials. One certainty arising from the accident appears to be more government oversight of the oil and gas industry.

Michael Bromwich, director of the US Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE), announced that regulators will have authority over contractors involved in deepwater leases in addition to operators. “I am convinced that we can fully preserve the principle of holding operators fully responsible, and in most cases solely responsible, without sacrificing the ability to pursue regulatory actions against contractors for serious violations of agency rules and regulations,” he said.

The BOEMRE’s report on the accident will be released before the 27 July deadline, Bromwich said. That report will examine all aspects of the disaster, including the steps that operators and contractors took leading up to and after the accident as well as the effectiveness of the blowout preventer. It is still too early to say what new regulations governing blowout preventers might be forthcoming, he added. After the conference, Bromwich toured several industry remote monitoring centers to observe their operation up close. Many conference attendees said they were braced for a new climate in the Gulf, one that may include even more new regulations than have been implemented in the past year.  

The Gulf will be slow to recover from the disaster, according to one new industry report. The study by consultancy Wood Mackenzie said that Gulf production fell 80,000 BOED in 2010 and will decline another 375,000 BOED this year because of the moratorium issued by the US government after the accident. Exploration drilling then will strengthen in 2012 and return to healthy activity in 2013. New projects will eventually allow Gulf production to rise beyond pre-accident levels in 2016, according to the report.

Last month, the US government approved Shell’s plan to drill in several deep-water locations in the Gulf. It was only the second deepwater plan approved by the government since the lifting of the deepwater drilling moratorium in October, both involving Shell discoveries. The Shell Appomattox field plan includes drilling eight wells in 7,200 ft. of water approximately 70 miles off the Louisiana coast. In the past year, the US government has approved plans for the drilling of 58 new offshore wells in the Gulf.