The rise in oil prices past $60 per barrel of Brent has seen project activity in the US Gulf of Mexico begins to rumble back to life after a year of demand decimation brought on by the coronavirus pandemic.
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The past year saw US independents Talos Energy and Murphy Oil quietly push on with development projects at Talos' Tokum and Murphy's Khaleesi-Mormont and Samurai.
Activity at Puma West began to purr again as BP resumed drilling its exploration well there in February.
Dutch-Anglo supermajor Shell indicated earlier this year that it intends to proceed with a postponed final investment decision on its ultra-deepwater Whale discovery in the Alaminos Canyon block.
With French giant Total now looking to secure a new semi-submersible production facility for its North Platte discovery, activity in a region that has endured three oil price collapses in 12 years looks to be picking up.
The timing is right for Total, according to Jared Kugler, a research associate at Enverus.
“Total is in this position in the Gulf of Mexico where they have a lot of discovered barrels, but not too many in their production stack right now. Look at their assets at Tahiti or Jack two to three years out from now, they’re declining anywhere from 25% to 35%,” Kugler told Upstream.
“And yet, they don't have any barrels coming online in the meantime to fill that gap. Where will the next barrel coming online come from for Total?”
Kugler suggested that the Chevron-operated Ballymore field — of which Total is holds a 40% interest in — could possibly provide that barrel if it were a “quick subsea tie-back development".
However, he added that Ballymore may come with challenges that could complicate timelines.
Discovered in 2018, it is in the large Jurassic Norphlet play first opened by Shell in 2010 with its discovery of Appomattox.
Subsurface challenges at Appomattox led to its partial impairment in 2020, contributing to a $1.3 billion writedown in Shell’s upstream division.
Kugler noted that Total is progressing through the front-end engineering and design work for North Platte, while also continuing to work through the pandemic on the Chevron-operated Anchor project, where it is a partner.
The Anchor and North Platte developments both require the use of 20,000 pounds per square inch (known as 20k) technologies, with Anchor to be the first deep-water high-pressure, high-temperature development for Chevron in the US Gulf.
“I think Total wants to see how the Anchor project progresses and the initial results of that work with Anchor being the first 20k project to come online,” said Kugler. “They want to see how the costs are going through development before they jump in with both feet.”
First production at Anchor is scheduled for second quarter 2024.
“At South Platte, they’ve continued to explore and look for more barrels to boost the economics of a joint development with North Platte and take a FID on the project. Any incremental barrel that they're able to tie in to the platform, whether it’s on start-up or five years after start-up to extend the plateau, then those are the most economic barrels to be able to develop in the Gulf of Mexico," Kugler added.
A final investment decision for North Platte by Total and field partner Equinor has been earmarked for this year.