Four years after the Deepwater Horizon disaster, giant new oil projects are returning to the Gulf—bigger and more expensive than ever. As The Wall Street Journal reports from aboard Royal Dutch Shell’s massive Olympus platform—which is larger than a New York City block and weighs more than an aircraft carrier—it is just one of roughly a dozen new multibillion-dollar platforms that are or will be pumping oil in the deep waters of the Gulf by the end of next year.
But the resurgence could be short-lived if the decline in crude-oil prices, down about 30% since June, continues and prompts companies to delay substantial investments in the Gulf. For the near term, though, the activity promises to return the Gulf to prominence as a major source of U.S. energy. In 2001, the waters produced about a quarter of all American oil and gas. Since then, production has fallen by half as wells petered out and the government issued fewer permits in the aftermath of the 2010 Deepwater Horizon explosion and oil spill. Last year, the Gulf accounted for less than 10% of the country’s energy production, in part because of soaring output from wells drilled in onshore shale formations.
The new projects in the Gulf, from such companies as Hess Corp., ExxonMobil Corp. and Chevron Corp., have the combined capacity to pump about 900,000 barrels a day—more than the oil and gas output of California. And that doesn’t include supplies from two projects led by BP, which declined to provide details on output. Read the full story (subscription may be required).
