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Oil interest in Gulf of Mexico may surge

Dec. 12, 2012 at 6:54 AM   |   Comments

HOUSTON, Dec. 12 (UPI) -- Oil interest in the deep waters of the Gulf of Mexico is in the early stages of a major long-term growth period, an investment analyst said.

The U.S. government imposed a nine-month moratorium on deep-water work in the Gulf of Mexico following the oil spill there in 2010. Jud Bailey, an analyst at brokerage company International Strategy and Investments, was quoted by the Platts news service as saying there was growing interest in the region.

"The deep water Gulf of Mexico is in the early stages of an extended growth cycle and is poised to be the strongest offshore market in the world through 2015," he said.

In November, the U.S. Department of Interior's Bureau of Ocean Energy Management had lease sale 229 in New Orleans, putting more than 20 million acres offshore on the auction block. The agency estimated the lease could result in the production of, on average, 150 million barrels of oil and 730 billion cubic feet of natural gas.

Bailey said his company's research into future drilling plans suggests there may be as many as 60 rigs operating in the region within five years.

"While an increase in deep-water drilling activity is widely expected in the Gulf of Mexico, the magnitude of the increase is under-appreciated," he said.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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