Due to the recent drilling successes in the deepwater play of the Gulf of Mexico, Energy and Environmental Analysis Inc. (EEA) said it expects total deepwater production to grow from the year 2000 rate of 3.6 Bcf/d to 6.1 Bcf/d by 2003, and into the 9-10 Bcf/d range by 2010.

In EEA’s Monthly Gas Update for January, the company said that production growth in the region is being sparked by the fact that the deepwater play is living up to expectations that it is a “world class play,” capable of making a major contribution to U.S. oil and natural gas supplies for decades.

The Arlington, VA-based consulting and analytical group said there have been approximately 240 deepwater discoveries to date, with 80 fields in production through year-end 2000. Of the 80 fields, 37 were purely gas fields and the remainder were either oil and gas or straight oil production fields.

The deepwater play’s contribution represented 7% of U.S. gas production in for 2000. Its crude production in 2000 averaged almost 650,000 b/d, accounting for 12% of U.S. crude production.

EEA’s research showed that production growth in the deepwater Gulf trend has been evident since 1995, when the play was producing 1.2 Bcf/d. Over the five years that followed, production grew by an annual average of almost 500 MMcf/d. However, the growth slumped from 1999 to 2000. The group’s data shows that production increased by only 250 MMcf/d between the two years.

EEA partially attributed the drop-off to several deepwater fields that had delayed start-ups. Likely due to unfavorable market conditions during 1999, the industry delayed or changed plans on some of the prospects, the group said.

Things do appear to be back on the upswing, however, as gas production in 2001 from the deepwater is estimated to have averaged 4.6 Bcf/d. The 1 Bcf/d increase over 2000 equals the largest annual increase historically, the EEA said. The western and eastern Gulf deepwater areas showed the largest jump in 2001, with only a modest rise in the central area.

Due to the amount of new deepwater development announcements, EEA said it expects deepwater production to continue to increase beyond the period for which announcements have been made. In its long-term forecast, the group said its estimated rate of increase is consistent with recent trends and is “achievable,” as long as the industry maintains anticipated investment levels.

EEA, in its report, said, “We believe that the Gulf of Mexico deepwater play will play a major role in meeting the nation’s demand for natural gas through 2010 and beyond. Our field level projections provide a valuable resource in determining the location and nature of the future increases in gas production.”

For more information on EEA’s Monthly Gas Update, visit www.eea-inc.com.

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