Gulf of Mexico Resurgence

By Jamie Ferguson, VP of Global Business Development, Maxwell Drummond

The offshore oil and natural gas industry is critical to the United States both from an energy supply perspective and due to its contribution to US GDP and job creation. In 2010, over 30 percent of the oil and 11 percent of the natural gas produced in the United States was produced in the Gulf of Mexico (GoM). This is crucial to US energy security. In addition, investment in the GoM affects many other sectors of the economy, creating jobs and generating tax revenue for the government.
The GoM has seen an increase in drilling activity and this will continue as the US prepares to put over 7,000 oil and natural gas blocks up for auction in June 2012. Already, there are 5,981 active leases and after new permitting regulations were issued, more than 130 new well permits were been granted with many more applications pending.

The U.S. Interior Department and Bureau of Ocean Energy Management will be leasing more than 38 million acres offshore, which is estimated to produce more than 1 billion barrels of oil and 4 trillion cubic feet of natural gas. These blocks begin 3 miles of offshore and continue to 230 miles offshore and will include shallow and deepwater acreage. This marks a significant resurgence in the GoM. Drilling activity is at its highest point since 2010’s Deepwater Horizon disaster.

The rise of the GoM will inevitably add to the global talent shortage. In 2011, the national oil company of Mexico, Pemex launched its first licensing round open to international operators since 1938. The Oil and Gas Journal estimated that as of 2007, Mexico held 12.4 billion barrels of proven oil reserves yet there is a lack of local skills to properly develop the reserves. By allowing foreign companies to enter the local market, Pemex hopes to expand its capabilities to develop unconventional gas, deepwater and bitumen.
As the GoM continues to gain momentum, the industry can expect and even greater need for engineers with offshore and deepwater experience. Petroleum engineers are again a hot commodity and the competition for this talent will continue to increase as the uptake in drilling activity continues.

According to Reuters, the oil and gas industry expects to add eight more deepwater rigs this year for a total of 29 rigs in the Gulf. Not only will rigs need to be staffed with up to 400 workers, but staff will be required for related industries. The Associated Press reported at least 230,000 jobs will be created by the GoM’s resurgence in these other sectors such as real estate, transport, manufacturing, technical services and construction.
Growth in this region is crucial to spur US job creation post-recession. The industry must collaborate to ensure the GoM is developed in a safe and environmentally responsible manner for future success.

About the author
Jamie Ferguson joined Maxwell Drummond’s Aberdeen team in 2006 and by July 2011 was promoted to Vice President of Global Business Development. Jamie has extensive experience managing executive level searches for clients spanning the oil and gas value chain and has deep industry networks developed from working on assignments in over 20 countries on 6 continents.

Maxwell Drummond International is a world leading retained search consultancy offering professional search services to clients in all sectors of the energy and natural resources industries.