Gulf of Mexico activities start to pick up again

Oil and gas drilling and development in the US Gulf of Mexico took a one-two-three punch with the tragic Macondo accident, ensuing oil spill and deepwater drilling moratorium that followed.

As the MMS transformed into the BOEMRE and drilling and development rules and regulations underwent a major overhaul, deepwater development in the GOM screeched to a halt over the last year. But five new drilling permits have been awarded by BOEMRE and US GOM developments seem to be picking up.

Here's a run-down of recent US Gulf of Mexico developments:

February 28, 2011: Noble Energy earned the BOEMRE's first deepwater drilling permit in the US Gulf of Mexico for a bypass well in the Mississippi Canyon area offshore Louisiana.

March 14, 2011: BOEMRE issued the second deepwater drilling permit to BHP Billiton for a well on its Shenzi development in the Green Canyon area.

March 17, 2011: Petrobras wins final approval to use the US GOM's first-ever FPSO on its deepwater Cascade-Chinook fields.

March 18, 2011: ATP was granted the third deepwater drilling permit for a revised permit to drill a new well in the Mississippi Canyon area.

March 21, 2011: Shell wins the first approval for a deepwater exploration plan on the Auger field in the Garden Banks area.

March 22, 2011: ExxonMobil wins the fourth deepwater drilling permit for a well in Keathley Canyon.

March 24, 2011: Chevron was awarded the fifth deepwater drilling permit for exploration in the Keathley Canyon region of the US GOM.

Additionally, some deepwater projects have moved forward as of late, with contracts awarded and commitments made. A biggie for the GOM, Chevron sanctioned the ultra-deepwater development of Big Foot -- a $4 billion project. A number of contracts have already been awarded for this project.

Chevron also moved forward with the development of its ultra-deepwater Jack-St. Malo, awarding the detailed design for the development to Mustang Engineering and the subsea pipeline design contract to JP Kenny.

Industry Feedback

While encouraging, Offshore Marine Service Association (OMSA) has publicly called the Bureau of Ocean Energy Management, Regulation and Enforcement's announcements "misleading."

"There were 32 deepwater drilling operations already permitted when the President imposed his moratorium last year. Interior Secretary Salazar is merely allowing existing permit holders to resume their operations," said Jim Adams, president and CEO of OMSA. "This administration has yet to approve and permit a new deepwater exploration proposal submitted in the last 11 months."

US Interior Sec. Ken Salazar has stressed that more work needs to be done before oil and gas drilling in the deepwaters of the US Gulf of Mexico fully rebounds.


To that end, many groups are working to step up safety measuring in the US Gulf of Mexico. Recently, the American Petroleum Institute began the process of creating a Center for Offshore Safety to help operators and service providers improve safety, communication and teamwork.

“After extensive review and development, the oil and natural gas industry has approved the creation of the Center for Offshore Safety, which will promote the highest level of safety for offshore operations, through an effective program that addresses management practices, communication and teamwork, and which relies on independent, third-party auditing and verification,” said Jack Gerard, API president and CEO.

There are many reasons why drilling and activity in the US Gulf of Mexico has slowed, but the question really should be not why, but for how long.

Is the US GOM back?