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WASHINGTON, DC -- Large deep-water oil discoveries
in the Gulf of Mexico have, over the past decade, resulted in
a near-doubling of the contribution associated gas makes to total
gas reserves, according a new Natural Gas Supply Association analysis
of Energy Information Administration (EIA) data.
During the 1990s, oil and gas producers shifted resources to
emphasize natural gas exploration. (Oil and Gas Journal
reports, for instance, that in mid-1991, about 40 percent of
domestic drilling rigs were searching for natural gas, while by
mid-1996, this proportion had risen to about 60 percent.) "Common
sense would suggest that this shift should have resulted in fewer
oil and proportionally fewer associated gas discoveries,"
said Philip Budzik, NGSA's director of regulatory affairs and
technical analysis.
"In fact, the opposite is true," he continued. "The
proportion of associated gas discoveries to total gas discoveries
has risen from about 8 percent in the late 1980s to 15 percent
in 1995."
Budzik points out that these trends are counter-intuitive only
if we fail to consider the significant impact of offshore deep-water
oil exploration on gas discoveries.
"The drilling rig count is heavily skewed toward onshore
activities," Budzik said. "Many more drilling rigs
are required for finding smaller reserves of oil and natural gas
that are typically found onshore. Conversely, a much smaller
number of offshore deep-water rigs is finding giant oil reservoirs
with enormous associated gas reserves. The growing proportion
of associated gas reserves is a direct result of the discovery
of large associated oil and gas deposits in the deep-water Gulf
of Mexico."
It is important to recognize the tie between associated gas reserves
and deep-water exploration, Budzik said, in order to understand
the growing importance of the deep-water Gulf to future domestic
gas production.
The Natural Gas Supply Association represents integrated and
independent companies that produce and market domestic natural
gas. Established in 1965, NGSA encourages expanded use of natural
gas and a regulatory climate that fosters competitive markets.
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This page was last updated August 31, 1997