ACCESS NUMBER: 31019 

STUDY TITLE: Deepwater Program: The Technology and Economics of Deepwater 

Production Projects 

REPORT TITLE: Deepwater Program: The Technology and Economics of Deepwater 

Production Projects 

CONTRACT NUMBER(S): 1435-01-99 CT 31019 

SPONSORING OCS REGION: Gulf of Mexico OCS Region 

APPLICABLE PLANNING AREA(S): Western, Central, and Eastern Gulf of Mexico 

FISCAL YEAR(S) OF PROJECT FUNDING: FY 1999 to FY 2004 

COMPLETION DATE OF REPORT: May 2004 

COST(S): $157,050 

PROJECT MANAGER(S): Noble/John Stiff 

AFFILIATION: ABS Group, Inc. 

ADDRESS: 16855 Northchase Drive, Houston, Texas, 77060 

PRINCIPAL INVESTIGATOR: Joachim Singelmann, Louisiana State University 

KEY WORDS: Deepwater program, technology, economic analysis, URSA, Sir Douglas 

Morpeth, Neptune, Baldpate, Pompano 

BACKGROUND: Deepwater development activity in the Gulf of Mexico has been 

increasing over the last several years. As exploration expands beyond the limits of 

1000 feet, technology is changing to meet the challenges of developing fields in 

deepwater. Developing these fields must be done safely, efficiently, and economically 

while protecting the marine environment. Deepwater development is achieved through 

the use of countless vendors, contractors and subcontractors. 

The original intent of this report was to trace back to major vendors. However, due to 

complications which continually arose it became impossible to do for the scope of this 

report. Information readily available for one project was not readily available from the 

next, which made data sets incomplete and not comparable. While some companies 

were willing to provide information, it became difficult to get as one descended the 

management chain. Demanding job responsibilities in the industry made it difficult for 

personnel to commit the necessary time for data gathering. 
ACCESS NUMBER: 31019 

The report fell short of unearthing the desired level of national involvement in deepwater 

developments and instead had to focus on working with the data and information 

obtained from various sources. 

OBJECTIVES: The purpose of this project was to study five specific deepwater Gulf of 

Mexico developments and show how their fabrication, installation, and operation has 

had an economic impact around the United States and, to a lesser extent, the world. 

DESCRIPTION: The report is made up of five major sections. The “Summary and 

Overview” briefly discusses the projects that were studied, an overview of each project, 

a summary of the findings, and possible strategies that could be taken by future studies 

to gather information. The “Summary of Information Gathered” presents information 

that was obtained on the different deepwater projects which includes where the 

structure was fabricated, the major sub-contractors, and any other additional information 

discovered during the course of the study. The “Economic Analysis” section was only 

able to obtain one suitable data set from one fabrication yard. Other data gathered 

were not in sufficient detail to warrant analysis. The “Chronology of Field Development” 

discusses the process of developing a deepwater prospect from pre-lease acquisition to 

abandonment. The last section, “Shallow Water vs. Deepwater”, discusses some of the 

major differences between developing a deepwater and shallow water field. 

SIGNIFICANT CONCLUSIONS: Most of the fabrication is around the Gulf Coast and 

most of the equipment vendors are local to the fabrication. The biggest economic 

impact is to Louisiana and Texas because they have the infrastructure to support the 

industry. Caveats to these statements are discussed in the background section. 

STUDY RESULTS: There is no doubt that deepwater development in the Gulf of 

Mexico is supported from companies all across the United States. The task of tracking 

vendors and their charges to a specific deepwater development becomes extremely 

complicated. This is a highly competitive industry and many vendors could not see the 

advantage of sharing information for this report. 

Only one deepwater project provided enough data to do an economic analysis. It was 

determined that the labor demand for the Morpeth fabrication project had a substantial 

impact on occupations that are required for the fabrication of platforms within the 

Houma Metropolitan Statistical Area (Lafourche and Terrebonne parishes). When 

compared to the Louisiana Regional Labor Market Area which includes Assumption 

parish, there was very little change in demand for labor. 

STUDY PRODUCT: Stiff, J. and J. Singelmann. 2003. Deepwater program: The 

technology and economics of deepwater production projects. U.S. Dept. of the Interior, 

Minerals Management Service, Gulf of Mexico OCS Region, New Orleans, LA. OCS 

Study MMS 2004-041. 179 pp.