Subsalt Remains Deep Challenge

Prices are rising, demand is soaring, supplies are tight — and iffy, depending on the geographic location — and many promising U.S. drilling locales continue to be off-limits.

Not surprisingly, many are looking to the industry's Old Faithful, aka the Gulf of Mexico, as the still-bright hope for increased domestic production. Indeed, it's the only readily accessible region harboring some frontier-type plays — the still-new shallow water deep gas play and the ultra-deep water — despite its lengthy producing history.

The lure of potential new finds in the GOM was underscored in the most recent Central Lease Sale190 held by the MMS, which garnered the highest number of bids of any Central Sale in the last six years. Sixty percent of the bids were on the shelf, apparently reflecting interest in the shallow water deep gas, according to Johnnie Burton, MMS director.

The sale also indicated continuing interest in the deep water, and Burton said the large number of tracts receiving bids in the ultra-deep water was particularly noteworthy.

As of March 2003 there had been 24 deep gas completions, with 17 discoveries, according to Debra Winbush at the MMS, who noted 100 wells were permitted in 2003 and 40 in 2004. The agency reported there have been 11 industry-announced discoveries in water depths greater than 7,000 feet and noted these ultra-deep water discoveries have the potential to open up entirely new geologic frontiers.

But the deep Gulf is salt country, meaning there are obstacles to overcome, and not just in terms of iron.

It's an image thing.

"The imaging challenge pretty much applies to everything," said Chad Harding, team leader seismic imaging group at BHP Billiton. "There are two fronts — acquisition and processing — on which we'll need to advance to improve seismic imaging for subsalt exploration in the Gulf.