Genesis Energy LP has entered into agreements on April 13 with Fieldwood Energy LLC, Ridgewood Katmai LLC and ILX Prospect Katmai LLC, two entities managed by Ridgewood Energy Corp., to provide downstream transportation services for 100% of the crude oil production associated with the deepwater Gulf of Mexico Katmai field development through the existing Tarantula production platform, owned by Fieldwood.
The Tarantula Platform, located in South Timbalier block 308, has the capability to process up to 25,000 barrels per day of oil from the Katmai field development. The Katmai field development is located in Green Canyon blocks 39 and 40.
The Tarantula Platform is currently connected to the company's 100% owned Tarantula lateral and the crude oil production will then be delivered to its 64% owned Poseidon crude oil system for delivery to shore.
The contracts for the Katmai field include life of lease dedications and no capital was required by Genesis to connect the Katmai production to its assets. First deliveries of oil are anticipated in the second quarter of this year.
“The dedication of the Katmai production is an exciting opportunity for us, and we look forward to working with Fieldwood, and the other interest owners, as they develop the Katmai fields,” Grant E. Sims, CEO of Genesis, said.
While some analysts have said oil demand may never reach pre-pandemic levels, Goldman Sachs said it expected this by the end of the year and predicted Brent would hit $80 and WTI $77 within six months.
The gloomy forecast will falter if COVID-19 passes quickly and the global economy recovers its appetite for hydrocarbons.
Crude stocks at the Cushing, Okla., delivery hub for U.S. crude futures rose by 1.8 million barrels to 47.8 million barrels, their highest since December 2017, the EIA data revealed.