The EIA estimates "a vast majority" of projected increases in U.S. production in the near term will come from Gulf deepwater fields similar to the site of the Deepwater Horizon spill, which currently represent about 70 percent of all Gulf oil production. This share is expected to grow in the next few years. A 2009 U.S. Minerals Management Service (MMS)
report forecasting production (PDF) in the Gulf of Mexico shows that as shallow-water production levels have fallen, deepwater production has taken up the slack.
What is driving the industry to pursue deepwater projects?
The upward trend in deepwater Gulf projects is mirrored around the world as oil companies look for new sources of production amid higher oil prices and growing global demand. Many older wells are experiencing production decline and new finds are often more expensive to extract and harder to refine, which some environmental and energy experts say heralds the end
to cheap and easy oil (McClatchy). Production from unconventional sources such as oil sands is on the rise, and deepwater drilling is considered one of the last frontiers in oil exploration. Oil investment analyst
D. Barry McKennitt said the only reason anyone is willing to drill in deepwater with the depths, temperatures, and other significant technical challenges is that other opportunities are closed. "They don't do it just for exercise," he said.
