http://oilprice.com/Latest-Energy-News/ ... locks.html"A total of 21 companies, including the Who’s Who of Big Oil, have registered to take part in Mexico’s deepwater oil auction to be held in December.
Shell, Chevron, ExxonMobil, British BP, French Total SA, Spanish Repsol, Norwegian Statoil and Mexican Pemex are among the major players now registered to bid for 10 blocks in the Gulf of Mexico, Prensa Latina reports.
Reserves in the blocks up for auction are worth an estimated US$10 billion, and this phase is being lauded as the most lucrative blocks. The blocks are in Perdido, near the US maritime boundary in the Gulf of Mexico, as well as in Cuenca Salina southward. Some 76 percent of the country’s potential oil resources are in the Gulf of Mexico’s deep waters"
And a day before, in the same magazine:
http://oilprice.com/Energy/Crude-Oil/Th ... cover.html"Offshore production has lower decline rates than shale does, but considerably higher decline rates than onshore vertical developments.
It is hard to pinpoint these decline rates exactly since each field is unique. What the industry generally believes is that offshore production declines at twice the rate of conventional onshore.
...
The majority of the oil and gas sector is in serious financial difficulty. It will take a long stretch of sustained high oil prices before anyone gets bullish on deepwater exploration again.
Existing discoveries will be developed. Investing money in those situations provides a guaranteed return on investment through cash flow. Wildcat deepwater exploration is not a business that is coming back for a long time, if ever."
$10 billion of reserves in that block, at $50/bbl, that's 200 million bbl? Getting produced over perhaps ten years but fuels the world for not even three days.
And "offshore production declines at twice the rate of conventional onshore", why is that so? Is it the geology in these fields, or higher pressure at greater depths, or different reservoir management offshore, i.e. pushing for the highest flow rates to get a return on investment ASAP?