Investors are not to be faulted for their preoccupation with onshore unconventional energy production in the US. After all, in a very sudden and somewhat unprecedented manner, the US finds itself hurtling towards the world number 1 spot in terms of oil and gas production, and perhaps maybe even exports as well.
Be that as it may, the world’s largest, most moneyed oil and gas producers have mostly given up on the US shale boom. In the first place, they missed out on the best acreage in the country when it was still cheap enough to turn a profit. More importantly, however, some of the largest reserves in the world are thought to reside underneath the seabed in some vertiginously deep waters.
Getting at these reserves costs a great deal of money, as well as what amounts to breathtaking feats of engineering. The only companies with the cash and the know-how to pull it off are the world’s largest oil and gas producers, such as ExxonMobil (XOM) , Royal Dutch Shell ($RDS.A), Total SA (TOT) , and, for better or for worse, the company formerly known as British Petroleum (BP) .
So it behooves all energy-investors to keep paying attention to offshore operations. Currently, Exxon and Russian state-run oil giant Rosneft are carrying through their partnership to explore in the waters of the Arctic Circle, where up to one fifth of the world’s undiscovered reserves are believed to be hiding out, and both companies are doing so despite an increasingly fragile geopolitical landscape that is putting the US and Russia at ever-greater loggerheads.
Another project though, and one that is already underway, is Shell’s Perdido well in the Gulf of Mexico.
The project is enormous, almost unthinkably so. Underneath almost 2 miles of water, the Perdido floating oil rig is currently the deepest in the world, built of some 45,000 tons of steel, and almost as tall as the Eiffel Tower. Peak production is estimated at some 100,000 barrels per day of oil equivalent.
The National Geographic video here embedded is a fascinating mini-documentary that outlines some of the most impressive features of Perdido. Moreover, it underlines the increasing importance of deep sea exploration for major oil companies, who are chomping at the bit to replenish their various legacy holdings.
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