05/11/2023 | Press release | Distributed by Public on 05/11/2023 16:56
In our May 2023 Short-Term Energy Outlook (STEO), we forecast that U.S. Federal Offshore Gulf of Mexico (GOM) marketed natural gas production will average 2.3 billion cubic feet per day (Bcf/d) in 2023 and will decrease to 2.1 Bcf/d in 2024, while GOM crude oil production will average 1.9 million barrels per day (b/d) in 2023 and in 2024. We expect seven new projects to come online in 2023 and 2024 in the GOM based, in part, on data from Rystad Energy. We expect these new projects to contribute 6% of natural gas production and over 15% of crude oil production to total GOM production by the end of 2024.
The new projects will mostly be in water depths greater than 1,600 meters. Projects in deeper waters typically have a lower natural gas to oil ratio and are usually focused more on crude oil production with some associated-dissolved natural gas production. Most GOM natural gas production comes from reservoirs located in relatively shallow waters, which tend to produce more natural gas relative to crude oil. Gross withdrawals of natural gas in the GOM have fallen over 80% since 2000, when 86% of GOM natural gas production came from natural gas wells. In 2021, over 71% of total GOM natural gas production came from oil wells.
With the expected start of the new GOM projects, we forecast crude oil production in the GOM will return to 2019 year-end levels in 2023, increasing 0.2 million b/d from 2022 levels. In contrast, we forecast GOM marketed natural gas production to slightly increase through 2023, averaging 2.3 Bcf/d before returning to 2.1 Bcf/d in 2024 as the associated natural gas production from the new crude oil fields is expected to offset only some of the production declines from aging natural gas fields.
Project delays increase uncertainty in our forecast. Shell's Vito and BP's Argos, each with peak production capacity of 100,000 barrels of oil equivalent (BOE) per day or more, were set to start in 2022 but instead started in early 2023. Shell's Rydberg and Whale projects are the only new projects in the forecast that are over 2,134 meters deep. Rydberg is a subsea tieback to a producing project that is also over 2,134 meters deep, Appomattox. We expect Whale will start in 2024, and it is expected to have a peak production capacity of 100,000 BOE/d or more. Like Rydberg, Taggart and Shenzi are subsea tiebacks. We also expect Chevron's Anchor, the first deepwater high-pressure development to achieve a final investment decision, will come online in 2024.
Producers continue to show interest in exploring and developing wells in deeper water. At the Bureau of Ocean Energy Management lease sale in March, almost 40% of bids were for projects deeper than 1,600 meters.
Daily spot prices by region are available on the EIA website.
See also:
TopSpot Prices ($/MMBtu) |
Thu,
04-May |
Fri,
05-May |
Mon,
08-May |
Tue,
09-May |
Wed,
10-May |
Henry Hub |
1.94
|
1.85
|
2.13
|
2.22
|
2.12
|
New York |
1.60
|
1.41
|
1.39
|
1.30
|
1.19
|
Chicago |
1.75
|
1.63
|
1.93
|
1.97
|
1.79
|
Cal. Comp. Avg.* |
2.47
|
2.45
|
2.74
|
2.65
|
2.48
|
Futures ($/MMBtu) | |||||
June contract |
2.101
|
2.137
|
2.238
|
2.267
|
2.191
|
July contract |
2.297
|
2.321
|
2.412
|
2.427
|
2.336
|
*Avg. of NGI's reported prices for: Malin, PG&E Citygate, and Southern California Border Avg. | |||||
Source: NGI's Daily Gas Price Index |
U.S. natural gas supply - Gas Week: (5/4/23 - 5/10/23) | |||
Average daily values (billion cubic feet)
|
|||
this week
|
last week
|
last year
|
|
Marketed production |
113.4
|
114.6
|
109.7
|
Dry production |
100.8
|
101.8
|
96.9
|
Net Canada imports |
4.8
|
5.1
|
5.5
|
LNG pipeline deliveries |
0.1
|
0.1
|
0.1
|
Total supply |
105.6
|
106.9
|
102.5
|
Data source: S&P Global Commodity Insights |
U.S. natural gas consumption - Gas Week: (5/4/23 - 5/10/23) | |||
Average daily values (billion cubic feet)
|
|||
this week
|
last week
|
last year
|
|
U.S. consumption |
65.4
|
70.5
|
66.8
|
Power |
30.5
|
28.4
|
28.4
|
Industrial |
21.6
|
22.4
|
22.1
|
Residential/commercial |
13.2
|
19.7
|
16.3
|
Mexico exports |
5.8
|
5.4
|
6.1
|
Pipeline fuel use/losses |
6.7
|
6.9
|
6.5
|
LNG pipeline receipts |
12.9
|
13.4
|
12.1
|
Total demand |
90.7
|
96.2
|
91.6
|
Data source: S&P Global Commodity Insights |
Rigs | |||
Tue, May 02, 2023
|
Change from
|
||
last week
|
last year
|
||
Oil rigs |
588
|
-0.5%
|
5.6%
|
Natural gas rigs |
157
|
-2.5%
|
7.5%
|
Note: Excludes any miscellaneous rigs |
Rig numbers by type | |||
Tue, May 02, 2023
|
Change from
|
||
last week
|
last year
|
||
Vertical |
21
|
-8.7%
|
-16.0%
|
Horizontal |
676
|
-1.3%
|
4.6%
|
Directional |
51
|
8.5%
|
50.0%
|
Data source: Baker Hughes Company |
Working gas in underground storage | |||
Stocks
billion cubic feet (Bcf) |
|||
Region |
2023-05-05
|
2023-04-28
|
change
|
East |
422
|
410
|
12
|
Midwest |
497
|
481
|
16
|
Mountain |
104
|
95
|
9
|
Pacific |
114
|
100
|
14
|
South Central |
1,002
|
977
|
25
|
Total |
2,141
|
2,063
|
78
|
Data source: U.S. Energy Information Administration Form EIA-912, Weekly Underground Natural Gas Storage Report |
Working gas in underground storage | ||||
Historical comparisons
|
||||
Year ago
(5/5/22) |
5-year average
(2018-2022) |
|||
Region |
Stocks (Bcf)
|
% change
|
Stocks (Bcf)
|
% change
|
East |
271
|
55.7
|
322
|
31.1
|
Midwest |
339
|
46.6
|
379
|
31.1
|
Mountain |
95
|
9.5
|
102
|
2.0
|
Pacific |
182
|
-37.4
|
202
|
-43.6
|
South Central |
745
|
34.5
|
803
|
24.8
|
Total |
1,632
|
31.2
|
1,809
|
18.4
|
Data source: U.S. Energy Information Administration Form EIA-912, Weekly Underground Natural Gas Storage Report |
Temperature - heating & cooling degree days (week ending May 04) | ||||||
HDDs
|
CDDs
|
|||||
Region |
Current total
|
Deviation from normal
|
Deviation from last year
|
Current total
|
Deviation from normal
|
Deviation from last year
|
New England |
106
|
12
|
-9
|
0
|
0
|
0
|
Middle Atlantic |
107
|
29
|
14
|
0
|
-1
|
0
|
E N Central |
119
|
36
|
26
|
0
|
-2
|
0
|
W N Central |
95
|
21
|
-4
|
0
|
-5
|
-1
|
South Atlantic |
56
|
22
|
24
|
20
|
-5
|
-19
|
E S Central |
56
|
26
|
41
|
3
|
-11
|
-27
|
W S Central |
23
|
13
|
15
|
26
|
-10
|
-31
|
Mountain |
58
|
-27
|
-30
|
14
|
1
|
2
|
Pacific |
58
|
7
|
7
|
1
|
-5
|
1
|
United States |
81
|
19
|
12
|
8
|
-4
|
-8
|
Data source: National Oceanic and Atmospheric Administration Note: HDDs=heating degree days; CDDs=cooling degree days |
Average temperature (°F)
7-day mean ending May 04, 2023
Data source: National Oceanic and Atmospheric Administration
Deviation between average and normal temperature (°F)
7-day mean ending May 04, 2023
Data source: National Oceanic and Atmospheric Administration