New oil production starts in the U.S. Gulf of Mexico

Feb. 6 (UPI) -- A Chinese partner at the Stampede oil field in the Gulf of Mexico said production started from a facility with a capacity of 80,000 barrels of oil per day.

U.S. energy company Hess Corp. is the operator at the Stampede field, with a 25 percent stake. The U.S. affiliate of the China National Offshore Oil Corp., Nexen Petroleum Offshore U.S.A., said Stampede started operating on Tuesday.

Processing is completed using infrastructure with a capacity of around 80,000 barrels of oil and 40 million cubic feet of natural gas per day.

"Three production wells are currently completed, and production is expected to ramp up through 2018," the Chinese company said in a statement.

Consultant group Wood Mackenzie expects a competitive field this year in exploration and production, with likely only the majors like BP and Exxon Mobil, along with national oil companies, investing heavily. The group said the deep waters of the Atlantic basins like Guyana and the U.S. Gulf of Mexico will see quick commercialization and most companies can break even with a price of oil below $50 per barrel.

Total U.S. crude oil production passed 10 million barrels per day late last year. The federal government estimates total output from the Gulf of Mexico to average 1.7 million barrels per day this year. Production is expected to increase at incremental levels as new fields start operating.

Hess Corp. said last week it has about $240 million set aside for development of the Stampede field. U.S. supermajor Chevron and Norwegian energy company Statoil round out the partnership at the field.