The Gulf of Mexico (GOM), despite the setbacks in the past year, is one of the world's great producing regions, and an increasing proportion of activity and production will happen in ultra-deep waters, requiring "constant activity, new capital investment and the participation of a set of large and small companies," PFC Energy said Friday.

PFC researchers detailed their findings in the white paper, "Importance of the Deepwater Gulf of Mexico."

To demonstrate the volume of reserves companies have found and developed in the GOM, the researchers projected future production by company from 2011 to 2020. The 15 most active companies in the GOM are forecast to produce a combined 5.6 billion boe over the next decade, of which three quarters will be oil.

BP plc, Chevron Corp. and Royal Dutch Shell plc are expected to be the three largest contributors, according to PFC.

Researchers explained how important the ultra deepwater will be in the years to come.

"In shallow waters, combined oil and gas production peaked at 2.5 million boe/d in 1997 and since then, despite continuing activity and investment, has declined at a rate of about 9% annually," they wrote. "In water depths between 1,000 and 5,000 feet, production peaked in 2002 at 1.5 million boe/d and declined to 1.0 million boe/d in 2009. Production from these water depths will increase slightly in 2010 as several new production installations come on line, but is projected to decline thereafter at an approximately 20% annual rate."

However, in the ultra-deep GOM, where production was estimated to have begun in 1998 with BP's Atlantis discovery, development is "still relatively young," said the PFC team.

"If oil and gas drilling and production are able to continue without constraint in the Gulf, it is the young fields in ultra-deep water that will make the greatest contribution to domestic oil production and energy security. By 2020, over 50% of the Gulf's production is projected to come from ultra-deep waters, which can produce 12.9 billion boe, or 45% of the Gulf's total projected output over the decade from 2011 to 2020."

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