Tides are changing in the Gulf of America (GOA). In recent years, offshore operators have focused on maintaining existing oil-production levels, but the latest guidance suggests the basin may be returning to growth. While the GOA was initially developed as a gas-focused play, producer focus on liquids has driven basin activity over the last decade. In 2010, GOA-Shallow produced approximately 0.4 MMb/d of crude oil, but production fell below 0.2 MMb/d following the 2020 pandemic and hasn’t exceeded that level since. Now, GOA-Shallow is only responsible for ~7% of total GOA oil production compared to the 12% average over the last decade. In contrast, GOA-Deep oil production grew substantially, adding ~0.8 MMb/d of oil between 2014 and 2020. GOA-Deep reached 1.8 MMb/d in 2020, but production levels have remained relatively flat since the pandemic.
The shift toward GOA-Deep development is largely due to the area’s lower gas-to-oil ratios (GORs), meaning more oil can be recovered there compared to the Shallow region. The below map shows GORs and initial production rates (IP rates) for wells drilled between 2010 and 2024 and highlights the shift in GOA production from gassier wells in GOA-Shallow to oilier wells in GOA-Deep. The smaller yellow and green dots closer to the shore (the Shallow) represent gassier wells with lower IP rates. The larger dark purple and blue dots observed further from the coast (the Deep) have higher liquids recovery and higher IP rates. BTU Analytics expects most new development to be targeting oil and for this activity to be in GOA-Deep.
Looking towards the future, stable oil prices have provided some incentive for producers to make investments in long-lead offshore projects. Guidance from producers across the GOA indicates a desire to further explore the region, and a number of recent announcements outline projects already in the works. Several of the supermajors have announced future projects in GOA-Deep to bolster oil production. The below table highlights the latest project announcements from the core operators. Together, these seven projects are guided to produce over 600 Mboe/d by the end of the decade.
Key projects to watch this year include:
In addition to the supermajors, smaller operators are also planning new developments through the end of the decade, signaling the basin is poised to grow across all operator types. With the GOA reasserting itself as a basin to watch, BTU Analytics will continue to monitor project developments and any additional guidance provided for new projects. For more info regarding BTU Analytics’ production coverage, and the rest of our energy market research and data at FactSet, click here.
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