Oil production at the U.S. Gulf of Mexico is set to increase for the next two years, according to the latest forecast of the Energy Information Administration.
Firstly, the U.S. Gulf of Mexico accounts for about 15 to 16% of the total U.S. crude oil production. In 2020, crude oil output in the region averaged 1,6 MMb/d. However, 2021 and 2022 are set to increase those levels of production.
Secondly, by the end of 2022, 13 new projects could account for about 12% of the total crude oil production from the Gulf of Mexico; with an amount approximate to 200,000 b/d.
Thirdly, oi production, in this regard, is set to increase in 2021 to 1.71 MMb/d; and even further 1.75 MMb/d in 2022. On the other hand, 2019 has the highest oil production record with 1,9 MMb/d, according to the EIA.
Moreover, during 2021 four projects are expected to begin operations; nine more are also scheduled to begin in 2022, according to data from Rystad Energy. Nevertheless, the EIA warned of a cautious sentiment, as the future of oil markets remains uncertain.
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Oil production at the Gulf to face a big hurricane season in 2021
In addition to an uncertain market landscape, hurricanes are a critical element to a Gulf of Mexico forecast. The Atlantic hurricane season is typically June 1-Nov. 30. In this regard, during those months, oil production as well as other upstream activities can be disrupted.
In fact, last year was a very difficult one for the Gulf of Mexico region, as it faced one of the most disruptive hurricane seasons, as well as the covid-19 pandemic and all the related shut-ins. Indeed, 2020 had the most shut-ins due to the hurricanes and covid-19 on record.
Furthermore, Hurricane Delta shut in almost 1,6 MMbbl of oil for over two days last October. Moreover, the combined effects of Tropical Storm Marco, and soon after the Hurricane Laura led to almost 15 days of shut production.
Indeed, this was more than double the shut-ins that the region had to endure since 2008, according to the EIA.
On the other hand, for this year, the Colorado State University’s Seasonal Hurricane Forecasting foresees that the 2021 hurricane season will be above the average of the last 40 years. The University anticipates eight hurricanes and 17 storms with name.