According to Newhouse News Service, energy companies find the Gulf of Mexico lucrative and are investing even more to tap further into its potential, despite the threats of hurricanes. Six months after Hurricane Katrina, Gulf oil production is still down 25 percent and natural gas is down 20 percent. More than 100 platforms were destroyed and almost 200 pipelines were damaged by the storm. But Newhosue News Service reported that all indications point to the Gulf of Mexico rebounding
from the storm's effects by the end of this year and that companies were seeking to expand. Shell has plans to spend part of its $15 billion exploration budget this year in the United States. BP (BP)
plans to spend about $2 billion a year through the end of the decade on exploration. And, among other projects, Chevron (CVX)
has recommitted to spending $900 million to develop its Blind Faith field in the Gulf.
The Minerals Management Service estimates there are 71 billion barrels of oil reserves in the Gulf, 56 billion of that in its deeper waters. That could rise if the eastern Gulf of Mexico is opened for drilling. By the end of the year, the agency estimates, about 2 million barrels of oil a day will be produced in the Gulf, compared with the 1.5 million barrels a day that companies produced before the storms last year. Production is expected to stay at that record level for at least five years. Gas production, however, isn't expected to make significant gains in the next few years. However, because of high demand for there may not be enough people, rigs or boats available to reach those estimated production amounts. (Source: Newhouse News Service)