With the recent drop in prices of Brent and WTI it makes me curious…does anyone know how much it costs per barrel to produce oil from a deepwater well in the US GOM?
[QUOTE=Kougar018;146295]With the recent drop in prices of Brent and WTI it makes me curious…does anyone know how much it costs per barrel to produce oil from a deepwater well in the US GOM?[/QUOTE]
Dolla fiddy… Just a guess, might be less.
I am sure that a short term drop in a bbl of crude will not change the dynamic in the GoM. I believe the long term desire by the majors to cut their E&P spending is a bigger issue to face down there.
I have always heard it was 70 dollars a barrel for deepwater to be profitable.
What kind of approaches can they take to reduce E&P spending besides delaying/shelving projects? I know that they’re holding back from signing new contracts. We are all seeing rig day rates drop. I don’t know what supply boat rates are.
I guess the question is how important is the deepwater GOM to their global portfolio?
Whatever it is, you will probably see more onshore development in the coming years or just subsea tiebacks to existing infrastructure in DW. In fact, a lot of the construction companies that build platforms and topsides are starting to shop around for more civil projects as they are foreseeing a drop in stand alone offshore O&G projects. Whatever projects are in the pipes right now will probably continue forward as planned but don’t expect to see a lot more giant projects of the caliber of Anadarko’s Lucius or Mars B! I recently heard a report saying that onshore E&P can still be profitable at around $25 per barrel. Time to come ashore!