Offshore Production Seen Flourishing Despite Depressed Oil Prices

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Eric Bell, Vice President of Corporate Development, was invited to News Radio 1200 WOAI to talk about offshore oil production and the dropping oil prices. Read the original article here.

Offshore oil producers are expected to be bullish when the first Offshore Technology Conference since last fall's drastic drop in world oil prices opens today in Houston, News Radio 1200 WOAI reports.

Eric Bell, Vice President of San Antonio based Group 42, an offshore services company, says offshore drillers with existing operations are well positioned to handle lower oil prices.

"Conventional on shore drilling has a much higher lifting cost to exploit and harvest reserves," Bell said.

He says the conversation at this week's conference is likely to be how to get more oil out of existing off shore wells, because once the wells have been drilled, usually at huge cost, it costs less to harvest the oil than it does through fracking.

"I think people who are in the offshore drilling business are more bullish today than those who are in some of the unconventional onshore E&P (exploration and production) companies."

The price of oil dropped sharply last fall, falling as low as $42 a barrel.  It has since recovered to roughly $60 a barrel, but Texas officials say the on shore rig count has fallen by 41% in the past six months due to the low profitability of fracking.

But Bell says existing offshore wells don't have that problem.

"Offshore drilling is increasing in this economic environment of low commodity process," he said.