Four new projects in the U.S. Gulf of Mexico will likely begin production in 2021 and nine more in 2022, according to Rystad Energy. (Source: Hart Energy)
Crude oil production in the U.S. Gulf of Mexico (GoM) is expected to grow in 2021 and 2022 on expectations of over a dozen new projects coming online, according to recent forecasts by the Energy Information Administration (EIA).
In its latest Short-term Energy Outlook (STEO) report, the EIA said 13 new projects could account for about 12% of total GoM crude oil production, or about 200,000 bbl/d, by the end of 2022.
Four of the new projects, which typically take several years to develop, will likely begin production in 2021 and nine more in 2022, according to Rystad Energy.
Production during that time is forecasted by the EIA to exceed 2020 levels, reaching 1.71 million bbl/d in 2021 and 1.75 million bbl/d in 2022.
In 2020, GoM crude oil production averaged 1.65 million bbl/d with the startup of eight new projects. Still, despite the new projects, annual production last year was lower than 2019 levels because of pandemic-related shut-ins and the most active Atlantic hurricane season on record, according to the EIA.
The Atlantic hurricane season is typically June 1–Nov. 30 with most GoM shut-ins historically occurring in October. However, hurricane-related disruptions started earlier than normal in 2020 with Tropical Storm Marco and Hurricane Laura in August.
The combined effects of Tropical Storm Marco, followed quickly by Hurricane Laura, led to 15 days of shut-ins, which the EIA said were the most shut-ins since 2008. Additionally, Hurricane Delta shut in 1.6 million barrels of oil production over two days in October of last year.
The EIA noted that hurricanes are a critical element in the GoM forecast. To forecast hurricane outages in STEO, the EIA said it uses historical data to determine an average percentage of outages for the Atlantic hurricane season.
Colorado State University’s Seasonal Hurricane Forecasting forecasts that the 2021 Atlantic hurricane season will be above average, compared with the 40-year average. The university estimates 8 hurricanes and 17 named storms, the EIA said.
The National Oceanic and Atmospheric Administration will release its Atlantic Hurricane Season Outlook for 2021 in May.
The GoM accounts for 15%–16% of U.S. crude oil production. Since 2000, the highest crude oil production year in the Gulf was 2019 at 1.9 million bbl/d.
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