Exciting Developments in Deepwater Oil Production in the U.S. Gulf of Mexico

LLOG Exploration, headquartered in the United States, is on the brink of achieving the first oil production from a deepwater project in the U.S. Gulf of Mexico. This milestone is drawing closer as the refurbishment of a floating production unit (FPU) named Salamanca progresses towards completion.

LLOG took over the Leon field as the operator in 2019 through an agreement with Repsol, which also granted access to the Castile field. By repurposing the former Independence Hub platform from Genesis Energy, LLOG intends to develop the Leon and Castile discoveries in the deepwater Gulf of Mexico.

The Leon discovery, situated approximately 250 miles southwest of New Orleans in 6,000 feet of water, yielded nearly 700 feet of high-quality net oil pay in the Lower Tertiary. Similarly, the Castile discovery, located in over 6,500 feet of water, revealed almost 400 feet of high-quality net oil pay in the Lower Tertiary.

As the operator of the FPU and the Leon and Castile discoveries, LLOG, alongside partners Repsol and O.G. Oil & Gas, has made significant progress in the construction of the FPU Salamanca. Key milestones have been achieved, with initial well operations completed at both Leon and Castile.

Eric Zimmermann, the Chief Operating Officer of LLOG, expressed optimism about the project, stating, “LLOG has a long history of developing prolific projects in the GOM safely, efficiently and economically. We are pleased to be progressing another world-class project and to have reached several important milestones while also optimizing financial flexibility through securing financing for the Salamanca project.”

The Salamanca project involves repurposing a former Gulf of Mexico production facility into an FPU with a capacity of 60,000 barrels of oil per day and 40 million cubic feet of natural gas per day. This approach reduces environmental impact by reusing existing infrastructure and shortens the timeline for bringing the discoveries online.

With the hull refurbishment completed at Seatrium in Brownsville, Texas, the FPU was delivered to Kiewit’s yard in Ingleside in October 2024. The final outfitting of the FPU is expected to be finished in early 2025, moving the project closer to its mid-2025 production target.

Zimmermann highlighted the positive environmental impact of the project, emphasizing a 70% reduction in emissions compared to constructing a new unit. The project’s construction in Texas and Louisiana further underscores LLOG’s commitment to local involvement and sustainable energy solutions.

As all initial wells to support the FPU Salamanca have been drilled and cased, including discovery wells at Castile and Leon, LLOG remains on track to meet its production goals. The FPU will be located in Keathley Canyon 689, enhancing the company’s capabilities in delivering complex deepwater projects.

Zimmermann concluded, “Our ongoing success and achievements in delivering complex deepwater projects reflect the dedication and expertise of our outstanding team. We look forward to continuing our progress and contributing to the energy needs of the Nation.”