As the pause of new U.S. Gulf of Mexico oil and natural gas leasing continues, NOIA is releasing the study, The Gulf of Mexico Oil & Gas Project Lifecycle: Building an American Energy & Economic Anchor.
Prepared by the firm Energy & Industrial Advisory Partners (EIAP), the report provides a detailed analysis of the multitude and diversity of jobs and investments generated throughout the 30-year lifecycle of U.S. offshore oil and gas projects. The report models both a shallow water (in water depths less than 200 meters) and a deepwater (in depths greater than 200 meters) project.
To demonstrate the offshore project development process, development activities were divided into five major development stages: pre-development, development, operations, infill drilling and tiebacks, and abandonment and decommissioning. Each stage was then further subdivided into more detailed stages, to account for the main activities required to identify, develop, operate, and decommission an offshore project.
In total, 20 detailed categories of a project’s lifecycle were identified and described. A multitude of jobs is tied to every single phase of developing, demonstrating the vast reach of the Gulf of Mexico oil and gas industry into our nation’s workforce. More than 345,000 jobs were supported by the Gulf of Mexico in 2019 and this number is projected to increase with the right government policies in place.
Key Findings
The report shows that more than 200 types of jobs involved in U.S. Gulf of Mexico oil and gas production. Together, the women and men who fill these positions work in concert to safely produce low-carbon and environmentally responsible barrels of oil and natural gas from the U.S. Gulf of Mexico.
Offshore oil and gas jobs are varied and high paying, with an average industry wage of $69,650, or 29% higher than the national average.
Every U.S. state has jobs and investments tied to the U.S. Gulf of Mexico oil and gas industry.
The report includes two example projects, with one each for deepwater and shallow water. These projects were sized to be in line with recent and planned U.S. Gulf of Mexico offshore oil and gas developments.
Deepwater Projects
For the model deepwater project, total lifetime spending of just over $8.8 billion is projected, with $3 billion in total direct wages. Average annual spending is projected at nearly $295 million, with the highest spending levels taking place during project development, when subsea tieback development is taking place, and during decommissioning. Annual operational expenditures are estimated at just under $125 million per year during normal operating years.
Direct employment due to spending associated with the example deepwater project development is projected to average over 1,435 jobs across the example project’s 30-year lifecycle. Indirect and induced employment is projected to account for an average of over 2,200 jobs.
While employment during the first two years of a project’s lifecycle is estimated at only an average of 880 jobs, during the most active years of the project employment impacts peak at nearly 14,400 jobs. During normal operations, total supported employment is projected at around 1,900 jobs.
| Average Annual Spending | Annual Direct Wages |
Average Annual Employment (Direct) | Average Annual Employment (Indirect/Induced) | Average Annual Wages |
| $295 million | $100 million | 1,435 jobs | 2,200 jobs | $69,650 |
The following table shows the average spending and annual employment for each stage of deepwater project development:
| Project Stage | Year Range | Average Annual Spending (millions) | Average Annual Employment |
| Pre-Drilling | 1 to 2 | $8 | 80 |
| Exploration | 2 to 3 | $161 | 1,680 |
| Appraisal | 3 to 4 | $135 | 1,400 |
| Design | 5 | $160 | 2,320 |
| Development Drilling & Completion | 7 to 9 | $558 | 6,260 |
| Hardware Manufacturing | 6 to 8 | $375 | 4,010 |
| Facilities Fabrication | 6 to 8 | $418 | 4,530 |
| Installation | 9 to 10 | $225 | 3,020 |
| OPEX | 10 to 29 | $124 | 1,900 |
| Infill Drilling and Tiebacks | 20 to 22 | $328 | 3,690 |
| Abandonment and Decommissioning | $30 | $370 | 4,650 |
Shallow Water Projects
For the example shallow water project, total lifetime spending of just over $1.3 billion is projected, with $485 million in total direct wages. Average annual spending is projected at nearly $45 million, with the highest spending levels taking place during project development, when subsea tieback development is taking place, and during decommissioning. Annual operational expenditures are estimated at just under $27.5 million per year during normal operating years.
Direct employment due to spending associated with the example shallow water project development is projected to average over 230 jobs across the example project’s 30-year lifecycle. Indirect and induced employment is projected to account for an average of over 390 jobs.
While employment during the first two years of a project’s lifecycle is estimated at only an average of 880 jobs, during the most active years of the project employment impacts peak at nearly 1,800 jobs. During normal operations, total supported employment is projected at around 430 jobs.
| Average Annual Spending | Annual Direct Wages |
Average Annual Employment (Direct) | Average Annual Employment (Indirect/Induced) | Average Annual Wages |
| $45 million | $16.2 million | 230 jobs | 615 jobs | $69,650 |
The following table shows the average spending and annual employment for each stage of shallow water project development:
| Project Stage | Year Range | Average Annual Spending (millions) | Average Annual Employment |
| Pre-Drilling | 1 to 2 | $1 | 10 |
| Exploration | 2 to 3 | $23 | 250 |
| Appraisal | 3 to 4 | $17 | 180 |
| Design | 5 | $33 | 470 |
| Development Drilling & Completion | 7 to 9 | $48 | 570 |
| Hardware Manufacturing | 6 to 8 | $44 | 470 |
| Facilities Fabrication | 6 to 8 | $80 | 880 |
| Installation | 9 to 10 | $4 | 320 |
| OPEX | 10 to 29 | $27 | 430 |
| Infill Drilling and Tiebacks | 20 to 22 | $39 | 600 |
| Abandonment and Decommissioning | $30 | $143 | 1,670 |
The Impact of the Leasing Pause
Importantly, jobs and spending for offshore oil and gas projects begin well before a lease is signed with the Federal government. Geologists, geophysicists, computer scientists, petroleum engineers, accounting and finance professionals and economists are all needed during the pre-lease phase to prepare for the lease sale and later phases. These women and men review and reprocess existing seismic and well data, provide prospect identification and analysis, and figure out lease valuation. These jobs are directly tied to lease sale activities.
The report includes more than 200 job types needed throughout the offshore oil and gas lifecycle, the quantity needed by year (for both deepwater and shallow water projects) and as well as the projected wages.
The following table shows jobs that are required in Year 1 of project development and their annual median wage.
| Job Title | Annual Median Wage |
| Architectural & Civil Drafters | $58,564 |
| Architectural & Engineering Managers | $144,293 |
| Civil Engineers | $99,278 |
| Electrical Engineers | $102,438 |
| Mechanical Engineers | $91,501 |
| Project Management Specialists | $81,674 |
| Secretaries & Administrative Assistants | $50,137 |
| Software Developers | $102,042 |
| Surveyors, Surveying and Mapping Technicians | $61,823 |
Previous Analysis of Gulf of Mexico Oil & Gas Production and Economic Impacts
In 2020, NOIA commissioned the study, The Economic Impacts of the Gulf of Mexico Oil and Natural Gas Industry, which projects the economic impact of continued U.S. Gulf of Mexico oil and natural gas production through 2040 and models the dramatic impacts of potential leasing and permitting bans in the region. That study can be viewed here.
Downloadable Content
