Top 12 Recent Gulf of Mexico Discoveries

Gulf of Mexico (GOM) despite being capital intensive still competes with unconventional for the capital investment. The recent investors pressure, the low oil prices and thrust towards energy transition in wake of climate change has dampened the exploratory efforts but the trend clearly shows that companies that have competitive advantage will continue their exploration and development programs.

KEY INSIGHTS 

• Exploration will partly fill the gap (460 billion boe) between supply & demand with 100 billion boe.
• Chevron, ExxonMobil and Shell; the leader in deepwater (DW) development & production continue to with their efforts
• Exploration specialist like Kosmos and LLOG are still focusing in high value DW prospects & continue to make discoveries
• The discoveries are increasingly at challenging water depths exceeding 20,000 ft.
• Standardization & Replication and proximity to existing infrastructure would reduce costs and likely hood of quick FID.
• BP & Equinor are notable exceptions, missing from the list

BOTTOMLINE

If energy transition is mismanaged and pace of renewables fail to bridge the demand gap, then the demand for oil will increase making the deepwater GOM a source of high margin barrels for the companies that have competitive advantage. The super majors are the only ones likely to take the risk and continue to invest in DW capital intensive projects.