ACG consulting economist David Dismukes has written an opinion piece for 10/12 Industry Report on the future of oil and gas activity in the Gulf of Mexico.
Thus, the declining fortunes for the GOM can almost entirely be attributable to the composition change in offshore drilling away from “higher frequency” natural gas drilling in shallow water, and to longer-horizon, more capital-intensive crude oil drilling in deep water.
Hence, it is unlikely that the current increases in crude oil price will lead to a level of offshore activity reminiscent of the prior two decades. Natural gas development in shallow water appears to have been completely ceded to onshore unconventional activity.
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