Skyrocketing oil prices caused by Russia’s war on Ukraine and Biden’s war on hydrocarbons present the Gulf of Mexico E&P industry with a conflicting brew of circumstances.
It’s been five years since the Deepwater Horizon blowout in the Gulf of Mexico, and the incident continues to widely impact the offshore industry and the public’s perception of oil and gas development.
On April 20, 2010, the Deepwater Horizon semisubmersible lost control of the Macondo well in Mississippi Canyon Block 252, southeast of Louisiana. Eleven men were killed in the explosion, the rig burned for 18 hours and then sank, and for the next 87 days, more than 3 MMbbl of crude oil were released into the Gulf of Mexico before the well was eventually brought under control.
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Despite analysts’ dire predictions about Covid-19’s short-term/long-term effects on the industry, demand and oil prices recovered significantly in second-and-third-quarter 2021. Even with consistently higher oil prices, U.S. operators showed uncharacteristic restraint, focusing on debt reduction and shrinking the DUC backlog rather than new drilling.