April 21, 2011 / 9:12 PM / 9 years ago

Post-spill, Gulf output down 20 percent-WoodMac

 * Ban, delays in permits means one-fifth less Gulf output
 * WoodMac doesn’t expect pre-Macondo output until 2016
 By Kristen Hays
 HOUSTON, April 21 (Reuters) - Oil and gas production from the deepwater Gulf of Mexico in 2011 will likely be 20 percent less than pre-oil spill levels because of a prolonged drilling shutdown, energy consultancy Wood Mackenzie said.
 The consultancy expects this year’s Gulf output to decline by 375,000 barrels of oil equivalent, or 20 percent less than pre-spill estimates of 1.89 million boe per day, said Molly Reyes, an upstream analyst for WoodMac.
 About 70 percent of that decline, or 262,500 barrels per day, is just oil, she said. The U.S. Energy Information Administration forecast a decline of 190,000 barrels per day in oil production this year.
 Both estimates stem from a five-month drilling ban imposed last year after BP Plc’s (BP.L) (BP.N) deepwater Macondo well ruptured and spewed more than 4 million barrels of oil in to the Gulf. Wednesday was the one year anniversary of the disaster and explosion that killed 11 men and sank a drilling rig.
 The Gulf provides about 30 percent of U.S. oil production, and 11 percent of daily natural gas output.
 U.S. regulators held off on issuing drilling permits for four more months producers showed they could meet new safety and equipment standards.
 Since Feb. 28 permits have been issued for 11 wells, most of which were in progress until interrupted by the ban. The latest permit went to Shell Oil Co RDSA.L for a well at its Perdido platform, which began production just three weeks before Macondo when new drilling stopped.
 “We’ve been very anxious about these wells,” said John Hollowell, head of Shell’s deepwater Gulf operations. “We want to get more production through the Perdido platform.”
 Reyes said she doesn’t expect output to exceed pre-Macondo levels until 2016, with permitting remaining slow in the interim as regulators hire more inspectors, drilling rigs get on location, an other delays pop up.
 “We just don’t think things are going to get back to normal overnight,” she said.
 Producers that have received permits this year include Shell Oil Co, (RDSa.L) Exxon Mobil Corp (XOM.N) Chevron Corp (CVX.N) Noble Energy (NBL.N) and BHP Billiton BLT.L
 BP, the largest leaseholder in the Gulf, has yet to acquire a permit.  (Additional reporting by Bruce Nichols;editing by Sofina Mirza-Reid)   

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