A New Wave in U. S. Oil Production: Offshore Takes the Lead

The U. S. oil industry is seeing a shift. Offshore drilling in the Gulf of Mexico is stepping into the spotlight. This change comes as onshore production slows down. Lower oil prices and aging shale fields are making it harder for onshore to keep up. New technology is making offshore drilling more attractive. It allows for drilling in high-pressure areas. This was not possible before. The U. S. government is also making it easier for companies to invest in offshore projects. Friendly regulations and lower royalty rates are helping. Offshore production makes up about 15% of the U. S. total oil output. But it is expected to drive growth in the coming years. The break-even price for offshore drilling can be as low as $20 per barrel. This is much lower than the average onshore break-even price of $48. The U. S. Energy Information Administration predicts a rise in Gulf of Mexico output. It is expected to reach 1. 89 million barrels per day in 2025. This is a significant increase from last year. Onshore production, however, is expected to grow by only 190, 000 barrels per day this year. Companies like Chevron are investing heavily in offshore projects. They expect a 50% increase in production over the next two years. New technology is unlocking previously inaccessible oil reserves. This could add up to 5 billion barrels of crude oil to production. The U. S. government is also planning to sell drilling rights in the Gulf of Mexico. This will encourage more companies to invest in offshore projects. Lower royalty rates will make these projects more profitable.