Texas Comptroller of Public Accounts

Texas Comptroller of Public Accounts, Glenn Hegar

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Special Energy Issue 2008
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Oil and Gas Drilling Projects Increasing in the Gulf of Mexico

Riding the swells of deepwater drilling

Taking the Plunge – Discovery in the Tahiti Field

The Gulf of Mexico can be a challenging environment, and the logistics of drilling thousands of feet below sea level can be daunting. But the results can be very rewarding.

In January 2002, Chevron Corp. and its project partners made one of the gulf’s largest deepwater petroleum discoveries in the Tahiti field, a reservoir approximately 190 miles southwest of New Orleans. The Tahiti field’s oil reserves are estimated to contain upwards of 500 million barrels.

To exploit the reserves, Chevron is completing construction of the Tahiti spar, a tubular, skyscraper-sized floating production facility scheduled to produce oil in 2009. The massive structure was towed to its position in the gulf in March.

When construction is complete, the Tahiti facility will be capable of capturing 125,000 barrels of crude oil and 70 million cubic feet of natural gas per day.

by David A. Rivers

After years of slumping oil and gas production in the Gulf of Mexico, industry operators are riding a wave of energy prosperity in the gulf’s deep-water areas where several large petroleum reserves have recently been found. In its 2007 - 2016 oil and gas production forecast, the U.S. Department of the Interior’s Minerals Management Service (MMS) projected a moderate increase in oil and gas production over the next 10 years. The increase could rise to as much as 2.1 million barrels of oil and 8.3 billion cubic feet of gas per day, compared to about 1.3 million barrels of oil per day and 7.7 billion cubic feet of gas per day currently produced.

Even before the MMS forecast was published, there had been ample evidence of the oil and gas industry’s growing interest in further exploring the gulf’s deeper water reservoir fields. Many of these lie beneath thick layers of minerals that hide important details about the petroleum beds below.

In spite of the harsh environment associated with drilling in deeper waters, Lars Herbst, regional director of MMS for the Gulf of Mexico, is optimistic about the oil and gas industry’s continued interest in the gulf’s deepwater frontier.

Deep Rewards

Texas leads the nation in oil and gas production and in refinery capacity. Crude oil from the gulf is transported via pipelines to any of the state’s 23 petroleum refineries.

Texas also benefits financially from gulf oil and gas lease payments on both federal and state mineral leases. Last December, the MMS released the results of a Western Gulf of Mexico lease sale. The sale netted $287 million and awarded 274 leases on federally owned property. Texas’ fiscal 2006 receipts from mineral leases in the Gulf of Mexico totaled more than $60 million.

Oil rig workers’ wages also contribute considerably to the Texas economy. Rig workers are well-trained and well-compensated. They include electrical and electronic engineers, instrument and systems specialists and others. The average starting annual salary for a worker on an offshore platform is about $50,000.

Tahiti Field Development

Green Canyon Area - Gulf of Mexico

Chevron’s Tahiti platform will float over 4,000 feet of water, with wells more than 28,000 feet deep. A discovery well is the first producing well drilled into a new oil or gas field. Production wells are drilled once oil and natural gas are discovered. The production wells in this illustration are about three miles apart.

Deepwater Drilling Reaches Record High in Gulf

Last year, a record 15 rigs were drilling in 5,000 to 9,000 feet of water in the gulf, a trend that will continue, says MMS director Randall Luthi, who views the continued increase in drilling activity as a show of confidence in the resource potential of the gulf’s deepwater frontier.

New rigs are under construction that promise to drill to even deeper depths. They include newer, more sophisticated drill ships and stationary semi-submersibles that will be able to operate at water depths of as much as 12,000 feet.

To successfully exploit deepwater reserves, major oil operators such as Exxon, Shell, Chevron and others must stay on the leading edge of platform and drilling technology. Modern oil rigs use sophisticated computers and software for automated systems control, global positioning, satellite communications, and a host of advanced techniques. FN

For more information about the Tahiti Field project, go to Chevron Corp.'s Web site at www.chevron.com.

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