CAMBRIDGE, Mass. - The April 20 blowout in the US Gulf of Mexico (GoM) has introduced a new dimension of uncertainty to the offshore oil and gas sector. While it is too soon to know the ultimate impact of the blowout and subsequent spill, the following facts—drawn from IHS CERA research—provide context to deepwater production’s role in global oil supply prior to the blowout. Future research from IHS CERA will examine the potential impacts of the spill on future production. 

• Global deepwater production capacity has more than tripled since 2000. According to IHS CERA, global deepwater production (2,000 feet, 610 meters, or more water depth) capacity rose from 1.5 million barrels per day (mbd) in 2000 to more than 5 mbd in 2009. Projections before the April 20 blowout in the GoM showed deepwater production capacity had the potential to rise to 10 mbd by 2015—a rate of expansion well above the expected average rate of global supply growth.

• Global deepwater production exceeds that of any country except Saudi Arabia, Russia and the United States. If deepwater production was viewed as its own “country,” it would exceed that of every other country except Saudi Arabia, Russia, and the United States.

• At the global and US levels, deepwater oil discoveries are increasingly important to the reserve base. The volume of new oil reserves coming from deep water has been on an upward trend since the 1990s—and has become particularly important in recent years. From 2006 to 2009 annual world deepwater discoveries (600 feet or more) accounted for 42% to 54% of all discoveries—onshore and offshore. In 2008 alone, deepwater discoveries added 13.7 billion barrels of oil equivalent to global reserves.

• Deepwater discoveries are significantly larger, on average, than new onshore discoveries. According to IHS data, the average size of a new deepwater (600 feet or more) discovery in 2009 was about 150 million barrels of oil equivalent compared with an onshore average of only 25 million barrels.

• US GoM deepwater projects are driving higher US oil production. According to IHS data, US GoM production accounted for 30% of US crude oil production in 2009—1.6 mbd out of 5.3 mbd. This 1.6 mbd of Gulf supply was the result of a 33%, or 399,000 barrels per day, increase in output from 2008. Most of the production increase was due to new production from five deepwater fields (Tahiti, Dorado, King South, Thunder Hawk, and Atlantis North Flank). Total US oil production recorded year-on-year growth in 2009 for the first time since 1991.

• US GoM production contributes to the drop in US oil imports. The incremental growth last year in the GoM offset about 4% of average daily imports.

• Natural gas production in the Gulf represented 10% of total US gas production in 2009. Offshore GoM natural gas production recorded a 3% increase in 2009 over 2008. This was the first increase after seven years of substantial declines and due to the start-up of Independence Hub (in the ultradeepwater at 8,000 feet) with its 1 billion cubic feet per day of capacity.