July 6 The Gulf of Mexico oil spill has
highlighted the risks of offshore oil production and the
potential costs involved in drilling deep below the ocean.
The explosion on April 20 at the Deepwater Horizon rig,
operated on behalf of BP (BP.L), has also reminded the oil
industry of the growing importance of offshore production and
the rising proportion of oil pumped from deep-sea wells.
Following are key facts about offshore and deep offshore oil
* Around 30 percent of the 85 million barrels per day (bpd)
of oil consumed around the world now comes from offshore oil
wells, according to the International Energy Agency. The agency
sees the percentage of global oil production from offshore wells
rising to 30.85 percent by 2015 from 29.97 percent this year.
* The global figures mask rapid growth in some parts of the
world, including the Middle East, Africa and Latin America
because of a relatively speedy decline in offshore activity in
Europe, where North Sea output is now falling after more than 40
years of production. Excluding Europe, offshore production as a
share of global output will increase by 2 percentage points to
around 27.5 percent by 2015, the IEA says.
* In the Middle East, offshore production will rise to about
9 percent of total output by 2015 from 7.7 percent, in Africa
offshore will rise to almost 5 percent from 4.25 percent and in
Latin America, offshore will increase to around 3.8 percent of
output from about 3 percent.
* Analysts say the increase in offshore oil output is likely
to accelerate after 2015 with some looking at up to 35 percent
by 2020, even with a continuing decline in the North Sea.
* Offshore output is an ever more important component of
production for countries outside the Organization of the
Petroleum Exporting Countries, which has massive onshore
reserves beneath members such as Saudi Arabia, Iraq and Iran.
* U.S. offshore oil production is expected to increase to
about 2 million bpd by 2015, or about 34 percent of total U.S.
output, from about 31 percent this year and 28 percent in 2007,
the U.S. Energy Information Administration said in its annual
forecasts in December.
* Offshore production is increasing rapidly in several
countries including Brazil, Angola and Russia.
* Up to a fifth of the world's undiscovered, recoverable oil
resources -- around 90 billion barrels -- are estimated to lie
within the Arctic Circle, an area mostly offshore that has
competing claims from the United States, Russia, Canada,
Denmark, Iceland and Norway.
* Definitions of "deep offshore" production vary but are
generally considered either to be more than 1,000 feet or more
than 2,000 feet. The term "Ultra-deep offshore" production is
also used loosely but can mean drilling in oceans more than 3 km
(1.88 miles) deep.
* Global deep offshore production capacity has more than
tripled since 2000, according to consultants IHS CERA, which
defines deep offshore as at least 2,000 feet (610 meters). IHS
says global deep offshore capacity is now more than 5 million
bpd, up from 1.5 million bpd in 2000.
* If total global deep offshore oil production represented a
country's output it would be the fourth largest producer after
Saudi Arabia, Russia and the United States.
* Most estimates and projections for offshore oil production
were made before the Gulf of Mexico spill, which could effect
significantly the pace of future development.
* In response to the spill, a six-month drilling moratorium
and new restrictions to licensing activities on the U.S. Outer
Continental Shelf were announced on May 27. Details included:
* No new drilling in water depths greater than 152 metres
(500 feet) for six months, including sidetracks and bypasses of
currently-drilling wells. Drilling on 33 wells suspended at the
first safe stopping point. Workover activities, well
completions, abandonment activities, interventions, and
waterflood, gas injection, and disposal wells not affected.
* Drilling offshore Alaska postponed until at least 2011.
* Various other offshore projects cancelled.
* Consultants Wood Mackenzie forecast production from deep
offshore Gulf of Mexico will be 93,000 barrels of oil equivalent
per day (boepd) lower during 2011 due directly to the six-month
ban on drilling. If new regulations for equipment and procedures
slow activity and delay projects after the moratorium, another
100,000 boepd could be deferred from 2011. Combined, these
deferrals could cut output from deep offshore Gulf of Mexico by
as much as 10 percent in 2011.
* If the regulations are tough and lead to oil companies
imposing their tighter rules on their worldwide operations, some
analysts say future global output could be trimmed by as much as
1 million bpd, curbing significantly the rate of expansion of
worldwide oil production.
(Reporting by Christopher Johnson; editing by Joe Brock and