Oil production in the Gulf of Mexico’s shelf and shallow waters faces an uncertain future due to unique challenges and a changing regulatory landscape, Fieldwood Energy President and CEO Matt McCarroll recently told a south Louisiana industry association.
The Courier reports McCarroll—who oversees the largest operator in south Louisiana—says Gulf projects remain out of favor with members of the investment community due to concerns about natural disasters and the industry’s aging infrastructure.
Fieldwood Energy owns interests in nearly 500 offshore blocks in the Gulf. Those assets are based mostly on the shelf in water depths of less than 1,000 feet.
“We have a very old and aging infrastructure, which makes production … very, very challenging,” McCarroll said during the South Central Industrial Association’s monthly meeting. “Half of our pipelines and platforms are now working at less than 25 percent of their capacity. They’ve probably outlived what was their initial expected life. You’re seeing the relationship between the operators of the production and the infrastructure owners become quite challenging.”
McCarroll says the easing of regulations under President Donald Trump has given rise to optimism, but warns that rolling back regulations could have negative consequences.
“There’s going to be more production in the U.S,” McCarroll said. “More production is going to mean lower prices, it’s just that simple. If the U.S. adds another 300,000 to 500,000 barrels a day to production over the next year, we’re going to see oil prices back down below $50. We’ve got to be careful here. Every other major oil-producing country has a handful of people who decide how much to produce. We’ve got hundreds and hundreds of companies to make that decision on very independent means.”
