Future supply of oil and gas from the Gulf of Mexico
Appraisals of oil and gas resources, which are typically presented in terms of proved and undiscovered categories, generally do not provide information on the costs of finding and (or) developing the resources. A model for integrating predictions from a discovery process model to estimate incremental costs of finding and producing undiscovered oil and gas resources (as of January 1, 1977) is presented and applied to the offshore Gulf of Mexico. Incremental finding and development costs were estimated separately for the Miocene-Pliocene trend (47,500 mi/sup 2/) and the Pleistocene trend (12,978 mi/sup 2/). An estimated 9.47 billion barrels of oil and 94.28 trillion cubic feet of gas or 25.19 billion barrels of oil equivalent (BOE) are contained in fields discovered prior to 1977 in the Gulf of Mexico. The application of the model indicated that, at $35 per BOE (in 1981 dollars) and an after-tax rate of return of 15%, an estimated 4.80 billion barrels could be economically discovered and developed. At $50 per BOE, the estimated discoverable oil and gas amounts to 6.78 billion BOE. However, these quantities represent only 19 and 27% of the 25.19 billion barrels discovered before 1977. These results indicate the mature state of exploration in the offshore Gulf of Mexico in areas of water depths of 656 feet or less. Analysis of the results indicates that drilling two to three wildcat wells in the Miocene-Piocene trend for every well drilled in the pleistocene trend will continue to be economically optimal. Results of the analysis also indicate that, if past trends continue, 71% of the hydrocarbon resources discovered after January 1, 1977, will be in the form of nonassociated natural gas. Crude oil is expected to account for only about 17% of the hydrocarbons discovered. Natural gas liquids, from nonassociated gas fields, are expected to amount to about 39% of the amount of crude oil recovered. 8 references, 9 figures, 17 tables.
- Research Organization:
- Geological Survey, Reston, VA (USA)
- OSTI ID:
- 6610429
- Report Number(s):
- USGS-PP-1294; ON: TI84901774
- Country of Publication:
- United States
- Language:
- English
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Future supply of oil and gas from the Gulf of Mexico
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GULF OF MEXICO
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PETROLEUM DEPOSITS
RESOURCE DEVELOPMENT
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DEPTH
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LOUISIANA
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TERTIARY PERIOD
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