Donate Bitcoin

Donate Paypal


PeakOil is You

PeakOil is You

Trump to Auction Off Swaths of Gulf of Mexico to Oil Compani

General discussions of the systemic, societal and civilisational effects of depletion.

Trump to Auction Off Swaths of Gulf of Mexico to Oil Compani

Unread postby AdamB » Tue 31 Oct 2017, 10:42:56


The Trump administration made history Tuesday in proposing that nearly 77 million acres in the Gulf of Mexico be made available for companies wanting to purchase federal oil and gas leases — the largest offering ever in the United States. In announcing the sale, the Interior Department compared the targeted waters to “about the size of New Mexico” and said the first lease sales off Texas, Louisiana, Mississippi, Alabama and Florida are scheduled for March next year. The event will include “all available un-leased areas on the Gulf’s Outer Continental Shelf,” a statement said. Interior Secretary Ryan Zinke first broached such a sale shortly after he took office in March, proposing to offer 73 million acres for leases. This part of the Gulf was the scene of arguably the worst environmental disaster in U.S. history, the 2010 Deepwater Horizon explosion and subsequent spill


Trump to Auction Off Swaths of Gulf of Mexico to Oil Companies
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Volunteer
Volunteer
 
Posts: 4632
Joined: Mon 28 Dec 2015, 16:10:26

Re: Trump to Auction Off Swaths of Gulf of Mexico to Oil Com

Unread postby rockdoc123 » Tue 31 Oct 2017, 11:50:26

This will be an interesting auction. Talking with a number of my former colleagues who are still in the game it seems the investment banks are starting to feel a bit better about opening up their pocketbooks to the right opportunities. With oil prices strengthening some of the offshore acreage will start to become attractive again from a full cycle E&P perspective. My guess is you will see the big boys pick up some of the more attractive acreage given they can stand to wait for prices to strengthen further. There may be some niche Gulf Coast players who see smaller economic opportunities closer in. There are a lot of independent US oil and gas companies still chasing classic Gulf Coast geology onshore Louisiana and TX (Rockman stomping grounds) and it is surprising to see the potential reserve size they are attracted to (i.e. small keystone fault traps or attic oil/gas with reserves not much higher than a couple of million boe). Some of those guys might venture offshore into shallow waters if the economics look right. Oil prices are rising and jackup full spread rates are quite low (if you can find one that hasn't been stacked or cannibalized) which favor this sort of activity.
User avatar
rockdoc123
Expert
Expert
 
Posts: 7090
Joined: Mon 16 May 2005, 02:00:00

Re: Trump to Auction Off Swaths of Gulf of Mexico to Oil Com

Unread postby ROCKMAN » Tue 31 Oct 2017, 12:16:19

Doc - You need to check with your old buddies and see what's actually going on. First, President Trump has a very long way to go to catch up with President Obama for the total number of acres he offered to lease during his terms in office. And that included tracts in the same area as the Macondo blowout. But even those lease sales, when oil prices were high, often no more then 5% drew a single bid. I suspect of the tracts being offered in the latest sale all have been offered before numerous times. In fact many have been drilled, produced, depleted and abandoned.

Except for drilling rediculously deep (like McMoRan) I haven't seen a major shallow water prospect in decades. Even the Deep Water trend is getting a bit long in the tooth with over 170 fields brought on production over the last 35+ years.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11219
Joined: Tue 27 May 2008, 02:00:00
Location: TEXAS

Re: Trump to Auction Off Swaths of Gulf of Mexico to Oil Com

Unread postby rockdoc123 » Tue 31 Oct 2017, 13:03:34

But even those lease sales, when oil prices were high, often no more then 5% drew a single bid. I suspect of the tracts being offered in the latest sale all have been offered before numerous times. In fact many have been drilled, produced, depleted and abandoned.


kind of knew that and your point is taken. My thought was that the Gulf Coast E&P continues at a reasonable pace onshore. Costs are low and the companies chasing the couple of million boe's seem to have a lot of old G&G hands working there who are comfortable with old well logs and older 3D data. There are still successful wells being drilled. Perhaps folks have already exhausted all the very small faulted structures and potential attic oil in shallow water. But as we both know economics are what drives the activities and that is a two-sided coin, expenses and prices. Back when oil was over $100 full spread rig rates were also extremely high. There might be a window of opportunity with rising price and low rig rates to chase some of the potentially smaller and previously uneconomic targets. Like most places in the world, we are now on auction/land sales of acreage that has been recycled time and again. That being said I know of many smaller discoveries that have been made on acreage that seemed to be largely worked over. Whether it was a tweak to processing and depth conversion or a new idea or missed pay in a well those opportunities worked out for the operators. This has certainly been the case in the Western Canada Sedimentary basin, in the Llanos basin in Colombia, parts of the Nequen basin in Argentina, offshore Malaysia, the Ghadames basin in Algeria, the Western and Eastern Desert in Egypt to name a few. Perhaps you are correct but I'll be interested to see the outcome.
User avatar
rockdoc123
Expert
Expert
 
Posts: 7090
Joined: Mon 16 May 2005, 02:00:00


Return to Peak Oil Discussion

Who is online

Users browsing this forum: No registered users and 11 guests