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Energy Tomorrow Blog

Graphically Speaking: Producing Oil Offshore

permits  offshore drilling  gulf of mexico 

Mark Green

Mark Green
Posted January 25, 2012

Yesterday, we looked at the time it takes to produce oil on federal lands, now let’s look at offshore.  As you can see from the chart below, just like on land, it takes time.  In general, from purchase of the lease to first production can take anywhere from 7 to 10 years in areas that have existing infrastructure. In this context, the timeline for OCS exploration and production can include:

  • Six months to a year for MMS administration and execution of lease sales in unleased areas.
  • One year for preliminary geological investigation and selection of areas of interest for additional seismic data acquisition.
  • One year to two years to acquire and to process 3D (and new wide azimuth) seismic data, and to identify drillable prospects from this data.

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Study: Effects of Gulf Drilling Policies Detailed

permits  offshore drilling  moratorium  gulf of mexico  access 

Mark Green

Mark Green
Posted January 11, 2012

Policies have consequences. Certainly, we’ve seen economic impact in the 2010 decision to halt deepwater drilling in the Gulf of Mexico and the subsequent slow pace of oil and natural gas permitting. A new study released by API underscores this:

The effects of the deepwater drilling moratorium and subsequent permit slowdown have already reduced total capital and operating expenditures in the Gulf of Mexico by a combined $18.3 billion for 2010 and 2011 relative to pre‐moratorium plans. Since April 2010, eleven deepwater drilling rigs have left the Gulf of Mexico. These rigs have gone to countries such as Brazil, Egypt and Angola. Through 2015, the investment in other regions instead of the U.S. associated with these rigs is estimated to be over $21.4 billion including drilling spending and associated project equipment orders, even accounting for the portion of equipment that will likely be manufactured in the United States. As a result of decreases in investment due to the moratorium, total U.S. employment is estimated to have been reduced by 72,000 jobs in 2010 and approximately 90,000 jobs in 2011.

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