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Released March 26, 2018 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--U.S. President Donald Trump has made expanded oil and gas production a cornerstone of his domestic agenda, but his administration is having a hard time enticing some of the biggest producers to buy in. The Interior Department tried last week to lease a record 77 million acres in the U.S. Gulf of Mexico, but found buyers for only a sliver. Industrial Info is tracking $35 billion in active offshore projects in the U.S. areas of the Gulf of Mexico, of which more than $11 billion worth are under construction and more than $9 billion worth are in advanced engineering phases.
Domestic oil production is widely expected to hit record levels in 2018, and Reuters predicts global oil majors will generate more cash this year than at any other time this decade. But exploration and production (E&P) companies bid on only 1% of the blocks up for sale in the U.S. Gulf, according to The Washington Post, despite royalty breaks the Trump administration provided for some of the shallower areas. The 148 blocks yielded about $125 million, far lower than previous sales.
Industrial Info is keeping tabs on some of the highest-valued drilling projects already under construction in the Gulf, including:
The Washington Post noted that the biggest spenders in last week's sale were big-name companies that already have active projects in the Gulf: Chevron (which spent $29.4 million for 24 leases), BP ($20 million for 27 leases), Shell ($22.9 million for 16 leases), and Total S.A. ($15.1 million for nine).
North of the Appomattox project, Shell is considering the proposed, $4 billion Vito Platform, which is in an area that is estimated to have as much as 300 million barrels of oil equivalent. As currently envisioned, the platform would have a throughput capacity of 100,000 BBL/d of crude oil and 100 million standard cubic feet per day of natural gas. Jacobs Engineering Group Incorporated (NYSE:JEC) (Dallas, Texas) would perform design-engineering services. For more information, see Industrial Info's project report.
Deepwater drilling is far more expensive--and dangerous--than onshore production, and investors have been pressuring some of the top E&P companies to dial back their big-ticket spending. Investors no doubt have worrisome memories of 2014, when oil and other commodity prices crashed after E&P companies had spent years buying up new properties and hiring workers; as a result, rigs stopped pumping and tens of thousands lost their jobs. Oil prices have recovered over the past year, but not enough to greenlight spending sprees.
Also, Reuters noted that Brazil and Mexico are offering deals for their own areas in the Gulf that producers find more agreeable. And U.S. onshore drilling technology has become safer and more economically efficient, sometimes at the expense of human labor.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Domestic oil production is widely expected to hit record levels in 2018, and Reuters predicts global oil majors will generate more cash this year than at any other time this decade. But exploration and production (E&P) companies bid on only 1% of the blocks up for sale in the U.S. Gulf, according to The Washington Post, despite royalty breaks the Trump administration provided for some of the shallower areas. The 148 blocks yielded about $125 million, far lower than previous sales.
Industrial Info is keeping tabs on some of the highest-valued drilling projects already under construction in the Gulf, including:
- BP plc's (NYSE:BP) (London, England) $9 billion Mad Dog 2 crude oil production platform, which is co-owned by Chevron Corporation (NYSE:CVX) (San Ramon, California) and BHP Billiton plc (NYSE:BHP) (Melbourne, Australia), and is expected to produce 140,000 barrels per day (BBL/d); see project report.
- Chevron's $5.1 billion Big Foot offshore oil and gas production platform, which is expected to produce up to 75,000 BBL/d of oil and 25 million standard cubic feet per day of natural gas; see project report.
- Royal Dutch Shell plc's (NYSE:RDS.A) (The Hague, Netherlands) $3.5 billion Appomattox oil and gas production platform, which is expected to produce 100,000 BBL/d; see project report.
- Hess Corporation's (NYSE:HES) (Houston, Texas) $2 billion Stampede subsea installation, which is expected to accommodate the production of 80,000 BBL/d of oil and 120 million standard cubic feet per day of natural gas; see project report.
The Washington Post noted that the biggest spenders in last week's sale were big-name companies that already have active projects in the Gulf: Chevron (which spent $29.4 million for 24 leases), BP ($20 million for 27 leases), Shell ($22.9 million for 16 leases), and Total S.A. ($15.1 million for nine).
North of the Appomattox project, Shell is considering the proposed, $4 billion Vito Platform, which is in an area that is estimated to have as much as 300 million barrels of oil equivalent. As currently envisioned, the platform would have a throughput capacity of 100,000 BBL/d of crude oil and 100 million standard cubic feet per day of natural gas. Jacobs Engineering Group Incorporated (NYSE:JEC) (Dallas, Texas) would perform design-engineering services. For more information, see Industrial Info's project report.
Deepwater drilling is far more expensive--and dangerous--than onshore production, and investors have been pressuring some of the top E&P companies to dial back their big-ticket spending. Investors no doubt have worrisome memories of 2014, when oil and other commodity prices crashed after E&P companies had spent years buying up new properties and hiring workers; as a result, rigs stopped pumping and tens of thousands lost their jobs. Oil prices have recovered over the past year, but not enough to greenlight spending sprees.
Also, Reuters noted that Brazil and Mexico are offering deals for their own areas in the Gulf that producers find more agreeable. And U.S. onshore drilling technology has become safer and more economically efficient, sometimes at the expense of human labor.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
