One of the most mature deepwater basins in the world, the Gulf of Mexico in the United States, still has plenty of production and could help fill the oil supply gap that is widening as many assets currently mature in production around the world. The basin, which currently pumps 15% of U.S. crude, has the potential to provide up to 2 million barrels per day (bpd) of additional needed new supply by 2040, McKinsey & Company said in a statement. new report this month. The Gulf can also do this with one of the lowest emissions per barrel of any major basin in the world. According to McKinsey, the deep waters of the Gulf of Mexico in the United States have one of the lowest emissions estimates per barrel in the world, just behind Saudi Arabia and the United Arab Emirates (UAE) and the basin in waters. deep in the North Sea, including off Norway and the United Kingdom. estimates based on his calculations and data from the International Energy Agency (IEA) and Stanford University.
Gulf of Mexico operators — mostly supermajors with net zero ambitions and targets for 2050 — are also motivated to continue pumping oil and gas into the region, which has less than half the emissions per barrel per year. compared to other major basins such as the US shale, shallow water developments around the world, other OPEC+ producers outside of Saudi Arabia and the United Arab Emirates, or the oil sands, according to McKinsey.
“This potential is significant for the many oil and gas companies investing in the Gulf of Mexico, especially those that have announced net zero emissions targets. And that’s important for the global climate,” the McKinsey consultants said in their report.
The relatively low emissions profile of the Gulf of Mexico is the result of four factors, according to the consultancy. These include minimal gas flaring as most natural gas is sold in local markets, efficient facilities minimizing methane leakage, high throughput at wells and production facilities, and finally, operators who are making decarbonization efforts to stay in line with environmental sustainability goals and in compliance. with the regulations.
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According to McKinsey Energy Insights’ Global Energy Perspective 2022 Current Trajectory scenario, deep-sea basins are expected to supply 7 million bpd of the 24 million bpd of new supply needed by 2040. The Gulf of Mexico could supply 1-2 million bpd of this, with significant implications for the US economy and global emissions.
The other supply is expected to come from areas such as the Middle East, off Brazil and off West Africa. However, the future contribution of each of these regions “is largely uncertain” due to OPEC’s production policies and decisions and the performance of new investment assets, among other factors, McKinsey said.
Regardless of where new oil supply comes from, one thing is certain: “Additional sources of supply will be needed to meet demand and offset the natural decline in current line production,” the consultancy noted. .
It’s a warning recently repeated by the world’s largest crude oil exporter, Saudi Arabia.
Just last week, Saudi Aramco CEO Amin Nasser said – once again – that the world will need oil and gas for the foreseeable future and that it need more investment in the industry just to keep supply stable amid declining production from mature wells, and even more investment to increase production capacity to meet global energy needs.
If it’s not the Gulf of Mexico in the United States, there will be other basins to fill the supply gap, but they could be much more emissions intensive.
“In the extreme case, the lack of continued resource access and development in the Gulf of Mexico would lead to a decrease in the low-carbon generation needed during the energy transition,” McKinsey said.
Without continued investment, the Gulf of Mexico could see production begin to decline as early as 2024 and fall by 800,000 bpd by 2040, from around 1.7 million bpd currently, McKinsey analysts estimated.
The supermajors are investing in the Gulf of Mexico. For example, BP said its net production was about 290,000 boe/d last year, and it expects to produce 400,000 boe/d in the Gulf of Mexico by the mid-2020s.
Chevron financially approved this year and is preparing to develop the Ballymore project, its first Norphlet reservoir development in the region. Ballymore could produce 75,000 bpd of crude, with first oil expected in 2025.
“The Gulf of Mexico has one of the lowest carbon intensive productions in Chevron’s portfolio. It has an average intensity of 6 kg of carbon equivalent per barrel of oil equivalent, a fraction of the global average,” the US supermajor said.
By Tsvetana Paraskova for Oilprice.com
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