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. Read this and other deepwater production facts compiled by IHS CERA.

The costs of building and operating upstream oil and gas facilities—which fell drastically in Q1 2009 after a prolonged period of escalation—hit bottom and were beginning to show signs of an upward trend at the end of Q1 2010, according to two cost indexes developed by IHS CERA.

Benchmarking cost performance among NA upstream operators, SAIC found that average General and Adiministrative (G&A) cost per BOE rose from 3.32 in 2006 to 4.65 in 2008. Using aggregate domestic oil and gas production as a guide, the increase of 1.33 in G&A cost per BOE translates to over 4 billion in lost profits in 2008 alone. To be competitive in the current environment, upstream companies must focus attention on this important cost element.

Unconventional shale gas plays and oil production are the focus of companies seeking to generate production growth, while capital will shift from offshore to onshore US following the Deepwater Horizon tragedy. Exploration and production spending, excluding acquisitions, is expected to rise by 8% to $353 billion in 2010 among the largest publicly traded oil and gas companies, according to the IHS Herold 2010 Global Upstream Capital Spending Report.