Production from new oil fields in the Gulf of Mexico is expected to prevent a decline in output due to natural depletion over the next two years, according to the Energy Information Administration (EIA). The EIA projects that oil output could reach 1.8 million barrels per day (bpd) this year.
Currently, 1.8 million bpd matches the daily average for Gulf of Mexico production. However, without these new discoveries, production would likely have decreased this year. The new fields are anticipated to increase production to 1.9 million bpd by 2025.
In contrast, new discoveries are unlikely to boost natural gas production, the EIA reports. The region’s natural gas output is expected to remain at 1.8 billion cubic feet daily through 2024 and into 2025.
While new oil field discoveries in the Gulf of Mexico are less frequent than in the early days of offshore drilling, they continue to occur. Recent finds include a deepwater oil discovery by Occidental Petroleum near an existing field, and a new field announced by Talos Energy, which is expected to start production in 2026. Additionally, Chevron and TotalEnergies began production at their Anchor field in August, with peak output projected to reach 75,000 barrels daily.
Since 2020, the Gulf of Mexico has seen significant conflict between the U.S. oil industry and the federal government. The administration’s efforts to limit new exploration, aligned with climate policies, have been met with strong opposition from the oil sector, which argues that these restrictions threaten energy independence and security.
Mike Sommers, president of the American Petroleum Institute, criticized these policies at an industry event earlier this year. He compared the situation to a hypothetical scenario where farmland development is blocked, leading to increased reliance on foreign food sources. He emphasized that energy issues, including jobs, security, and inflation, are key concerns for voters heading into the upcoming elections.
The Biden administration’s decision to limit new exploration in the Gulf was part of its broader climate agenda. Last October, the federal government introduced its five-year plan for the region, which included the fewest lease sales in industry history—just three. This decision followed President Biden’s initial moratorium on new oil and gas drilling on federal lands, a policy later overturned by a federal judge.
Despite these restrictions, the administration approved the Willow oil project in Alaska, amidst opposition from climate activists who also wanted a halt to all new Gulf exploration.
Amid the ongoing debate between climate activists and the federal government, oil and gas companies have continued their exploration efforts. In 2023, eight new discoveries were announced in the Gulf’s deepwater section, including Murphy Oil’s Longclaw-1 and Hess Corp.’s Pickerel-1, which began production this year. Talos Energy struck oil at six of its exploration wells and subsequently acquired QuarterNorth Energy for $1.29 billion, expanding its presence in the Gulf’s deep waters.
Despite the government’s challenges, energy security appears to be prevailing over transition concerns. This is especially significant given the decline in North Sea oil and gas production due to both natural depletion and restrictive policies.