The World Can’t Live Without Deepwater Oil

The majority of new production is assumed to come from the development of existing reserves, such as the offshore and deepwater deposits in the Gulf of Mexico, which currently yield 30% of America’s oil production. Deepwater wells like the ill-fated Deepwater Horizon made up 15% of total U.S. production in 2002 and are expected to rise to 30% of total production by 2015.

New deepwater production of known reserves is supposed to provide up to 40 million BPD of global production — a staggering amount, given the monumental capital, engineering and expertise that must be brought to bear to bring oil up from miles below the ocean floor.

The logistical and engineering challenges of deepwater drilling are mind-boggling. The Deepwater Horizon rig — a behemoth the length of two football fields — had drilled the deepest known oil well in the Gulf of Mexico last September, through one mile of seawater to the ocean floor, and then six miles down to the oil deposit. Known as Tiber, this oilfield is expected to produce in its lifetime some 3 billion barrels of oil. Sounds impressive, but it’s less than six months of current U.S. consumption.

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