Stuttering outlook for Gulf of Mexico

Despite ever-rising oil and gas production, drilling activity is looking weaker

After a challenging 2018 that saw project momentum in the US Gulf of Mexico (GOM) falter amid weaker oil prices, the outlook for drilling activity in 2019 appears diminished. The November price declines could have a chilling effect on investment, amid rising project costs. It marks a contrast with the situation in early 2018, when oil prices were high and deep layoffs, sustained cost-cutting, new technology, and optimisation had stripped the industry down to lean and mean. Sustained relief on commodity prices, which rose above $60/bbl and even above $70/bbl, was felt and welcomed. Also welcomed were changes in the US tax landscape. The December 2017 tax restructuring reduced corporate income