British Petroleum (BP) has announced the discovery of two new oilfields in the Gulf of Mexico and has approved a $1.3 billion expansion of its Atlantis three oil field. The new expansion will include eight new wells to the existing offshore oil and gas platforms and they are speculating that it will increase production by 38,000 barrels per day by 2020. The expansion comes nearly a decade after BP’s Deepwater Horizon disaster that caused more than $60 billion in damages to the region.
The United States Department of the Interior announced a revision last week about an increase in the potential production in the Wolfcamp Shale and Bone Spring Formation. The announcement stated, two underground layers in the Delaware Basin in the Permian shale play of West Texas and New Mexico, contain 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas and 20 billion barrels of natural gas liquids. This represents the largest pool of oil and gas reserves anywhere in the United States. The Permian is already the driving force in production hitting an all-time high in November of 11.7 million barrels per day (bpd) as it is the biggest producer and boasts the quickest rate of production at 3.63 million bpd.
The United States sanctions against Iran’s oil exports entered into full force last week as the United States attempts to cripple Iran’s oil-dependent economy and suppress their nuclear desires. Although Washington has vowed to halt all purchases of crude from Iran, it recently supplied eight countries with waivers to continue imports without penalty for the next 180 days. While President Trump views this as a way to stabilize any fear of global price spikes, Iranian President Hassan Rouhani believes the United States had no choice but to grant the waivers and Iran has publicly stated they will continue to export as much oil as needed. However, one thing to be cognizant of is, how will Iran ship their product?
The geopolitical climate in the Middle East continues to intensify as the Saudi government is preparing to admit that Washington Post columnist Jamal Khashoggi was killed in the Saudi consulate in Turkey two weeks ago. President Trump has threatened to impose severe punishment on Saudi Arabia if it is proved they are behind the murder while the Saudi government has said they will respond with greater action if the United States moves forward. The threat of Saudi Arabia using their oil reserves as a weapon has the world on the edge of their seat.
The Bureau of Land Management, under the Department of the Interior, held a two-day auction on 142 parcels of land in New Mexico at the beginning of September. The results from this single sale has surpassed their sales numbers from all transactions in 2017 combined. The land lease sale of nearly US $1 billion will provide ample land to further boost the already growing oil production in the state.