A senior Department of Energy (DoE) official, Kyle Haustveit, has indicated that hydraulic fracturing (fracking) is expected to be deployed for the first time in offshore oil and gas production, potentially boosting recovery rates and extending the life of ageing platforms. Speaking at the Offshore Technology Conference (OTC) in Houston, Haustveit noted that this would mark a reversal of the typical technology flow, where offshore innovations eventually become affordable for onshore use. Instead, onshore fracking technology, which has transformed US shale production and made the country the world's largest oil producer, is now poised to move offshore.

Regulatory Progress and Technical Context

The US federal government has advanced a plan to use hydraulic fracturing to stimulate wells offshore California. The Bureau of Ocean Energy Management (BOEM) announced in March that it will prepare an environmental impact statement for the Santa Clara Unit Development and Production Plan, which proposes fracking 16 wells from the Gilda platform, installed in 1981 and operated by DCOR. While well stimulation is not new offshore—gravel packing has been used for decades to prevent sand from entering the wellbore—hydraulic fracturing differs by using water to increase reservoir pressure and fracture rock, creating cracks that extend the drainage area for oil. Haustveit explained that offshore fields have historically targeted the highest quality rock, often bypassing lower quality resources. By applying fracking to create enhanced permeability, these bypassed resources could become economic, especially given that platforms and gathering systems are already in place.

Potential Benefits and Recovery Rates

A key mission for the DoE is increasing recovery rates, which are currently around 10% in US onshore reservoirs. Haustveit likened this to buying a pizza, cutting out only a 10% slice, and discarding the rest. He emphasized that as some operators near the end of new drill opportunities, the industry must shift toward extracting more from existing wells, moving internationally, or moving offshore. Applying fracking to offshore platforms could help harvest more of the bypassed hydrocarbon resources. Haustveit cited ExxonMobil's petcoke-based proppant as an example of onshore innovation that could be adapted offshore, as its buoyancy allows it to travel further and create larger fracture areas for oil flow.

Trade-offs Between Onshore and Offshore Production

Haustveit highlighted the trade-offs between the two production types. Offshore wells have a much lower decline rate than unconventional onshore wells, providing a more stable production stream. However, unconventional wells can be planned, drilled, and fracked in less than six months, allowing for rapid response to shifts in demand, whereas offshore wells involve a multiyear planning process. The ongoing Middle East conflict, which has disrupted oil and gas shipments through the Strait of Hormuz, has increased global demand for safe alternative energy suppliers. Haustveit noted that the US is well-positioned to meet this demand, as its energy can be shipped safely from both coasts. He also pointed to the current climate as creating opportunities for data acquisition, seismic processing, and AI-aided resource identification, which could help pinpoint resources that were previously difficult to locate.