Overall rig counts are down and rates are low, but the deepwater Gulf of Mexico is going strong.

Exploration and construction in the deeper water of the Gulf of Mexico are on a roll that will help push operators and larger service companies to good times this year and in the foreseeable future.
A lot of that optimism stems from 2002 results. According to US Minerals Management Service (MMS) Gulf of Mexico Regional Director Chris C. Oynes, "Calendar year 2002 was a year of significant deepwater activity in the Gulf of Mexico, despite the general downturn in drilling. Twelve new deepwater discoveries were made, and three of these were in 8,000 ft (2,440 m) or greater water depths."

In addition, he continued, 14 new deepwater projects began production in 2002 to raise the total producing deepwater projects to 65. "Deepwater development projects continue at a fast pace, and the 14 new projects in the Gulf of Mexico include 11 that were subsea production systems that tied back to another project," he said. Those additions raised the number of subsea projects in the deep water to 41 of the 65 total projects.

The three surface developments were spars.

Kerr-McGee brought in its Vortex discovery in 8,334 ft (2,542 m) of water in Atwater Valley 261, followed by BHP Billiton with its Cascade discovery in 8,143 ft (2,484 m) of water in Walker Ridge 206 and Shell Offshore's Great White discovery in 8,009 ft (2,443 m) of water in Alaminos Canyon 857.
Although Shell hasn't released numbers on its Great White discovery, IHS Energy puts the number at 500 million boe, putting it on a par with Thunder Horse North, but behind the 1 billion boe Thunder Horse - the largest discovery in the Gulf of Mexico - the longstanding front-runner Mars with 700 million boe and the newly defined reserves of 635 million boe at Atlantis.

BHP has set aside US $1.1 billion for the development of Atlantis on the Atwater Foldbelt. The project includes seven blocks in water ranging from 4,400 ft to 7,100 ft (1,342 m to 2,166 m) deep. It wants production from Atlantis to start in 2005.

BHP has found a home on the Atwater Foldbelt, not only with Atlantis, but also with interests in Mad Dog, Neptune, Vortex and its new Shenzi discovery. Pre-drill reserves estimates at Shenzi were 200 million to 500 million boe. That group of wells will make a handsome addition to future Gulf of Mexico production with BP's Mad Dog expected on line at 80,000 b/d in late 2004.

In the 4,000-ft (1,220-m) range, BHP Billiton brought in Shenzi in 4,394 ft (1,340 m) of water in Green Canyon 654 and Chevron found Tahiti at 4,017 ft (1,225 m) of water in Green Canyon 640.
A step deeper, Kerr-McGee drilled to West Navajo in 3,905 ft (11,91 m) of water in East Breaks 689. Samedan tapped Slammer in 3,599 ft (1,098 m) of water in Mississippi Canyon 849. Murphy reached Quatrain in 3,328 ft (1,015 m) of water in Green Canyon 382, and Shell discovered Deimos in 3,003 ft (915 m) of water.

This past year was a great year for production gains from deep water as BP brought Horn Mountain, Aspen, King's Peak and King on line. Kerr-McGee had three new-field startups with Nansen, Boomvang and Navajo, all in the East Breaks area.

Marathon's Camden Hills, along with TotalFinaElf's Aconcagua and BP's King's Peak, formed production links in the Canyon Express pipeline. Camden Hills currently represents production from the deepest water in the world at 7,240 ft (2,208 m) but Shell's Coulomb in 7,600 ft (2,318 m) of water in Mississippi Canyon 657 will eclipse that record if it comes on line this year as scheduled.

Other deepwater startups include Agip's King Kong, Spinnaker's Sangria, Samedan's Lost Ark, ExxonMobil's Madison and Shell's Einset.

Among the first deepwater projects on line this year, BHP Billiton brought on its Boris-1 well in 2,400 ft (732 m) of water in Green Canyon 282 at a rate of 7,500 b/d initially. It anticipates production of 10,000 b/d of oil and 15 MMcf/d of gas at peak production with the yet-to-be-drilled Boris-2 raising the level to 18,000 b/d of oil and 27 MMcf/d of gas.

BHP will tie Boris production back to the Typhoon platform in Green Canyon 236.
The deepest discovery in the Gulf of Mexico and the world is Unocal's Trident discovery in 9,727 ft (2,967 m) of water in Alaminos Canyon 903, close to Shell's Great White discovery in Alaminos Canyon 857. The second well at the site resulted in reserves downgraded to a maximum of 200 million boe. Now, Unocal is trying to figure out whether to spring for platform to develop the seven-block complex or whether to tie back individual wells to an existing platform.

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