Deepwater oil and gas production is expected to increase by 60% by 2030to contribute 8% of global upstream production, according to a new report from Wood Mackenzie, cited by Rig Zone.
Ultra-deepwater production is expected to continue growing at breakneck speed to account for half of all deepwater production by 2030. In the oil and gas exploration and production (E&P) industry ), deep water is defined as water depth greater than 1,000 feet while ultra-deep water is defined as greater than 5,000 feet.
Deepwater production remains the fastest growing upstream oil and gas segment, with production expected to reach 10.4 million boe/d in 2022 from just 300,000 barrels of oil equivalent per day (boe/ j) in 1990. Wood Mackenzie predicted that by the end of the decade this figure will exceed 17 million boe/d.
American oil and gas major Exxon Mobil (NYSE: XOM) is the latest oil major to make a deepwater oil and gas discovery. Last month, Exxon announced that it had completed two other discoveries on the Sailfin-1 and Yarrow-1 wells on the Stabroek block offshore Guyana, bringing discoveries on the block to more than 30 since 2015.
Exxon disclosed that the Sailfin-1 well was drilled in 4,616 feet of water and encountered 312 feet of hydrocarbon-bearing sandstone, while the Yarrow-1 well was drilled in 3,560 feet of water and encountered 75 feet of sandstone containing hydrocarbons.
Exxon did not disclose how much crude oil or gas it estimates the new discoveries contain, but did raise a previous production forecast for the third quarter from older discoveries in the area.
The supermajor has boosted development and production off Guyana at a pace that “far exceeds the industry average”. Exxon’s two approved offshore projects in Guyana, Liza Phase 1 and Liza Phase 2, are now producing above nameplate capacity and have already averaged nearly 360,000 bpd of oil. The supermajor expects Guyana’s total production to exceed one million barrels per day by the end of this decade.
Exxon said a third project, Payara, is expected to launch by the end of 2023, while a fourth project, Yellowtail, could begin operations in 2025.
Exxon is the operator of the Stabroek block where it holds a 45% stake while partners Hess Corp. (NYSE: HES) and Cnooc (OTCPK: CEOHF) hold a 30% and 25% stake, respectively. Exxon’s oil and gas production well below record levels, averaging 3.7 million boe/day mid-year, in line with last year but nearly 9% below the 4.1 million boe/day established in 2016.
By Alex Kimani for Oilprice.com
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