Drilling ban spooks Gulf of Mexico

A long-term federal waters embargo would trigger severe production losses in the region, forcing firms to withdraw capital

An extended US federal lease ban preventing new offshore drilling in the Gulf of Mexico would have significant consequences for the long-term future of the region, disrupting operator strategies and sinking output drastically over the next decade. Under this scenario, natural declines in the Gulf of Mexico would sharply set in as operators work through their inventories and reallocate capital to domestic onshore projects—either to non-federal land or acreage already sanctioned—or to international assets. Consultancy Rystad Energy estimates that an offshore drilling ban lasting two presidential terms would reduce production by up to 200,000bl/d by 2030. A ban lasting just one term would hurt