Gulf Of Mexico: The Unexpected 40% Surge In Deepwater Oil Production

Nearly all signs point to a massive comeback for Gulf of Mexico oil production, with output expected to reach 1.80 million barrels per day in 2025. That’s right, the Gulf is back—almost. After peaking at 1.8 million barrels daily in 2019, production dipped but is now poised to surpass previous highs. About time.

Deepwater operations dominate the scene. Like, seriously dominate—accounting for 94% of the region’s crude production in 2023. Meanwhile, natural gas from these waters has been on a sad, steady decline. From over 5 trillion cubic feet in 2001 to less than 1 trillion cubic feet annually in recent years. Ouch.

New projects are the game-changer here. They’re expected to add 231,000 barrels per day through 2025, with additional crude from new fields contributing 85,000 barrels daily. The EIA forecasts natural gas output to remain flat at 1.8 Bcf/D through 2025. Shell’s Whale project alone is designed for up to 100,000 barrels per day equivalent. Not too shabby.

The tech is getting better too. Eight fields are being developed using subsea tiebacks to existing floating production units. Five new fields will produce from four new floating units. They’re modeling deepwater wells using automated decline curve analysis for over 3,000 wells. Fancy.

Looking ahead, the outlook gets even better. Production is forecast to hit 1.81 million barrels per day in 2026. New fields will be pumping out 308,000 barrels daily by then. Record oil production of approximately 2 million barrels per day is expected for at least the next couple of years. Boom!

Reserves are up too—by 22.6%. We’re talking 5.77 billion barrels of oil and 7.15 trillion cubic feet of natural gas still recoverable. This growth comes despite the overall active rig count decreasing from 750 to 517 in the Lower 48 states from December 2022 to October 2025. The Gulf continues as the nation’s primary offshore source, generating 97% of all U.S. outer continental shelf oil and gas production.

But here’s the kicker—lack of regular lease sales could mean trouble long-term. Someone should probably fix that.