Gulf of Mexico Oil Exploration Rebounding
GlobalData reports that oil drilling in the U.S. Gulf of Mexico is making a comeback following the chaos in the U.S. deepwater oil industry caused by the infamous BP oil spill. The new research states that despite increased U.S. government restrictions that followed the Deepwater Horizon explosion combined with the risks and high costs involved in deepwater drilling climbing crude oil prices will see Gulf of Mexico oil production surpass its former records.
BP plc’s Macondo well experienced a blowout in April 2010 resulting in the destruction of the Deepwater Horizon drilling rig a five million barrel oil spill and a six-month moratorium issued by the U.S. government for certain areas of the Gulf. However a recent surge in issued permits indicates the return of large-scale deepwater drilling to the area.
The U.S. government issued 44 drilling permits in the first quarter of 2012 a promising figure considering that throughout all of 2011 and 2010 the US government issued only 79 and 74 permits respectively. This growth suggests that deepwater drilling in the area will return to levels seen before April 2010 by the end of 2012.
One major attraction for deepwater oil exploration in the Gulf is the stable political climate and clear regulations while many other parts of the world see oil and gas investment opportunities marred by regime changes or nationalization. The U.S. and Mexican governments entered into an agreement in February 2012 which set a framework to facilitate hydrocarbon exploration and production in the Gulf. The agreement enables lease operators in the U.S. to coordinate with Petroleos Mexicanos (Pemex) the Mexican National Oil Company (NOC) for joint exploration and production of hydrocarbons in the Mexican maritime boundary. The agreement allows a greater level of freedom for U.S. oil corporations and is expected to increase investment and drilling in the area.