Some 2.5 billion barrels of discovered oil await development in the deepwater Gulf of Mexico. In a recent report, energy consulting firm Wood Mackenzie values these assets at $13.5 billion. The Scotland-based firm calculates average capex costs of $11.60 per barrel of oil equivalent (BOE) for on-the-bench oil.


That contrasts to 3.3 billion BOE contained in fields currently being developed, including Thunder Horse, Tahiti, Great White and Shenzi, and 3 billion BOE in producing fields.


The crop of probable developments reflects the industry’s move into deeper waters and deeper Lower Miocene and Lower Tertiary pays. All but one of the likely projects lie in the Central Gulf, and Walker Ridge and Green Canyon protraction areas are epicenters of recent discoveries.


The largest field in the probable category is Jack, in Walker Ridge 159, with estimated reserves of 375 million BOE. Knotty Head, in Green Canyon 512, and Pony, in GC 468, each contains reserves of 351 million BOE. St. Malo, in WR 678, holds 350 million BOE. These four fields account for more than half of the reserves in the probable category.


Fields larger than 200 million BOE will likely be developed as stand-alone projects, and smaller accumulations will use subsea tie-backs. In terms of reserves, the leading operator in these upcoming projects is Chevron Corp., followed by BP, Hess Corp. and Nexen Inc.


Not surprisingly, development times are extending and costs are rising in the deepwater GOM. From its 2007 list of probable developments, WoodMac forecasts peak production rates of more than 600,000 BOE per day will not be reached until 2017.

The extended period reflects the complex challenges the industry faces to bring massive Lower Tertiary fields onstream. The probable developments will cost nearly $2 per BOE more than projects already in development and more than $5 per BOE above fields already onstream.

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