Some more thoughts: notice the hurricane glitches never sent production down to ZERO. As we proceed downslope: won't future GoM glitches hit ZERO & MOL every more frequently, thus forcing the glitch duration [width] to vastly increase? Now add in WT's ELM to the GoM equation: wouldn't that make the glitch recovery even more delayed,thus adding even more extra width to each hurricane glitch?

For example: assume we hit Zero from a big Cat 5. We can't get things in the GoM even minimally restarted until we pull from the SPR or other finished fuel reserve unaffected by the 'Cane. Since this will take some time--it adds time to the glitch width back to some later recovery point. But a lot of companies could go broke while they wait for FFs and electrojuice [plus workers] to restart their operations.

Sorry, I don't have the expertise to thrash this concept out further. But maybe some other TODers can numerically flog this dog?

2. Even if the latest and greatest tech & safety measures are incorporated into future deepwater rigs, FSPOs, pipelines, etc--nobody wants to be a hero and try to work through a CAT 1-5. Thus, the infrastructure might ride out the huge waves and winds just fine, but it will still be idle during these storms [which adds to the total cost of GoM oil & natgas extraction].

A minimal Cat 5 hurricane has a windspeed of over 135 kts which is about twice the speed of a Cat 1 and has aproximately 8 times the destructive force because the power of the wind increases as the cube of the wind speed. Since I live in South Florida less than two miles from the beach I've hunkered down through Cat 2s and 3s. I know first hand the results, it ain't pretty. To suggest that a rig can take a direct hit from a Cat 5 and come through unscathed is what I would call being unduly optimistic...

BTW I've read some where on NOAA's website that there was some talk of upping the ante by adding a Cat 6 to the Saffir-Simpson Scale due to the possibility of more intense hurricanes in the future.

Hopefully the rigs of the future will be designed to handle 30 ft waves and 200 kt winds. As for the ones out there now, good luck with them.

This 1,2,3,4 probably forces the GoM operators to get the FFs out quick compared to a more leisurely ME extraction, if the ME so desired.

My question, which is slightly off point, is: to what extent is accelerated production occurring also in order to get an adequate IRR on these fields that are so capital intensive?

I ask because I'm curious (ok, maybe even a little obsessed) about how such factors might adversely skew the world production curve. It would also seem to be a factor that accentuates boom and bust cycles.

Someone should write an article titled:
The Rise and Fall of decline rates

It's actually a huge issue. After URR and decline rates, what else is there? (said with tongue in cheek)

We do have empirical data but even that varies widely. The IEA says 9%, but maybe 6.5% with good technology and field management, and wether the field is old or young, small or large, onshore or offshore

I remember Euan Mearns saying "the tea leaves say 5%"

Westtexas points to the lower 48 and North Sea and I think comes up with 4.8% as an aggregate.

I heard that Slumberger says 8% is their rule of thumb

and what is an undulating plateau but a decline rate in disguise?

Polytropos,

The 3.5% annual decline rate is an observed decline rate from the 2002 peak to now, noting that the 3.5% is only a rough estimate due to the production volatility caused mainly by hurricanes. The annual decline rate used going forward is 7.9% which is roughly equal to the current extraction rate, assuming remaining recoverable oil of 6.5 Gb. The change from 3.5% to 7.9% may occur in early 2011 as planned capacity additions decrease sharply in 2011.

Assuming US GoM of 23 Gb and using historical GoM production data from the EIA, the following extraction rate history is shown below.
http://tonto.eia.doe.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_m.htm

The most recent data month is Jan 2009 and shows a record annual extraction rate of 8.2%. This high extraction rate may be caused from high production ramp up at new large projects such as Thunder Horse. However, it might be partly caused by low oil prices forcing some operators to temporarily increase extraction rates to generate more revenue. It appears that a more reasonable annual extraction rate should be about 7% which implies that the Jan 2009 GoM production rate should be about 1.25 mbd rather than the EIA's actual 1.45 mbd.

The hurricane risk and the financial need to quickly recover the large investments for deepwater production force the oil companies to extract oil at very high initial rates. In March 2008, the IEA discussed non OPEC decline rates and found that US offshore average annual decline rates for mature fields were almost 20%. In addition, the IEA stated that "newer fields in these areas - often deepwater, smaller accumulations of oil - are also prone to rapid build to plateau, followed quickly by sharp decline."
http://omrpublic.iea.org/omrarchive/11mar08sup.pdf

For simplicity, I used a constant 7.9% annual decline rate for forecasting the production rate. In reality, the future annual decline rates will oscillate. In 2008 and 2009 there have been large capacity additions of about 0.5 mbd from Blind Faith, Neptune, Thunder Horse, Shenzi and Tahiti. This should keep the decline rate low. In 2010 there is another addition of 0.2 mbd from Perdido Hub, Chinook, Cascade and Phoenix. However, there are few planned additions from 2011 to 2014 which probably means that the annual decline rates will be greater than 8% starting in early 2011.
http://en.wikipedia.org/wiki/Oil_megaprojects

The IEA's 2009 Medium Term Oil Market Report, to be released by the end of this month, will probably give an update on offshore decline rates.
http://omrpublic.iea.org/mtomr_june09.htm