While much of the oil industry faces uncertain futures, the Gulf of Mexico is experiencing a remarkable resurgence in its deepwater sector. Crude oil production is expected to reach a whopping 2 million barrels per day by 2025. That’s no small feat. This 40% surge is happening when everyone’s screaming about the end of oil.
Deepwater wells are the real stars here, producing nearly 94% of the Gulf’s crude oil. These aren’t your granddaddy’s shallow water operations. We’re talking extreme depths—over 1,000 feet of water. Shell’s upcoming Whale project will operate at a mind-boggling 8,600 ft deep and is projected to produce 85,000 B/D when it starts production in late 2024. Try holding your breath that long.
Deepwater giants dominate the Gulf, plunging over 1,000 feet down where only the most advanced technology dares to venture.
New projects are pumping life into the region. They’ll add 231,000 barrels daily by 2025 and 308,000 by 2026. Major players like Chevron’s Ballymore and Beacon Offshore’s Shenandoah are joining the party, each contributing production rates that would make onshore drillers weep with jealousy. Despite the clean energy growth in America’s energy mix, the Gulf’s oil production remains a critical component of our energy portfolio. The Energy Permitting Reform Act of 2024 will further boost development by requiring at least 1 oil and gas lease sale annually from 2025 to 2029.
The technology making this possible isn’t your basic drill-and-pump setup. Multistage hydraulic fracturing, subsea tiebacks, and floating production units are changing the game. Engineers can now reach previously untouchable resources. It’s like finding money in your winter coat pocket—if that coat was buried under 8,000 feet of water.
Peak production will likely hit around 2025-2026 before gradual decline sets in. By 2040, production might drop to 1,250 thousand barrels daily. But hey, that’s the future’s problem, right?
Initial well productivity has taken a hit—down to 5,640 barrels daily from over 8,000 in 2021. Still impressive compared to most global operations. These deepwater developments will contribute about 13% of total U.S. crude production in the coming years.
Natural gas isn’t being left behind either, holding steady at 1.6-1.7 Bcf/d. Not too shabby for what some call a “dying industry.”
References
- https://jpt.spe.org/eia-new-projects-poised-to-add-231-000-b-d-to-us-gulf-of-mexico-output-by-2025
- https://incorrys.com/energy/oil-supply/us-oil-supply/gulf-of-mexico-offshore-oil/
- https://www.eia.gov/todayinenergy/detail.php?id=65444
- https://www.spglobal.com/commodity-insights/en/news-research/latest-news/crude-oil/010225-commodities-2025-year-2025-to-see-record-oil-output-but-few-recent-lease-sales-may-take-longer-term-toll
- https://neworleanscitybusiness.com/blog/2025/10/08/us-crude-oil-production-record-2025/
- https://peakoilbarrel.com/us-july-oil-production-another-new-high/
- https://www.bsee.gov/stats-facts/offshore-information/deepwater-activity
- https://www.workboat.com/offshore-industry-keeps-oil-production-growing
- https://www.doi.gov/pressreleases/interior-announces-major-increase-gulf-america-oil-and-gas-reserves
