OPINION: It’s been an awfully long five years. But it seems like the US Gulf of Mexico is truly starting to pick up some shine again after the brutal downturn.

The region has played an important role in recent mergers and acquisitions that have energised the sector, such as Murphy’s takeover of assets of Llog Exploration and Llog Bluewater.

It is also certainly part of the reason Chevron, if less so Occidental, is interested in Anadarko.

Companies are talking about the US Gulf as a place they can both make money and generate shareholder value again — and talking about projects other than small-scale and low-risk tie-backs.

In the last five years, the energy business has become smarter and leaner.

Murphy Oil, after almost leaving the US Gulf for good several years ago, earlier this year sold off its position in Asia to double down on the Gulf of Mexico, citing benefits that include oil-rich resources, tax advantages and exciting projects.

The company saw the prize in its acquisition as new development projects framed up under Llog’s leadership, headlined by what could be a potential new standalone development at the Khaleesi-Mormont project.

Kosmos Energy is another example following its acquisition of Deep Gulf Energy last year, telling investors it was attracted to a basin where it saw valuable returns but also limited competition.

In addition to its reliable tie-back strategy Kosmos has also sketched out a new area of exploratory interest in the western Garden Banks area — a prospect called Resolution, aided by a new proprietary algorithm from partner BP that enables it to zero in on new resources.

Other exploration activity is also stirring. Upstream’s list of potential exploration and appraisal wells to watch on the US side is more than double that listed last year, for example.

Companies have been restocking exploration acreage at lease sales, including little-touched areas in the far eastern US Gulf that show promise for the future.

A range of interesting prospects worked up early this decade before the downturn are also popping back up onto the radar with new ownership or financing in place.

One is the Blacktip discovery on Alaminos Canyon Block 380, originally developed by Equinor, which was drilled by Shell this year in a new area.

Equinor will also dust off its Monument prospect, another pre-downturn target, later on this year, with a rig hired for late 2019. Hess is also chasing new exploration targets and plays in the US Gulf, albeit at a conservative pace.

US supermajor Chevron and Shell of course never stopped exploration efforts in the downturn, though one would never know that given the scant discussion of the topic in company filings until recently.

Larger development projects are chugging forward, with the technology filling out to tackle the long-running challenge of completing and producing from ultra-high temperature, high pressure reservoirs in the Lower Tertiary.

Chevron’s Anchor project could be a groundbreaking development, helping pave the way for others such as Total’s North Platte and Llog-operated Shenandoah.

The offshore business in recent years has seemed like a third rail to investors, with the explosive growth of the US onshore sector having looked set to keep shale as king of hearts, minds, portfolios and budgets forever.

But the land business looks soft this year and the US offshore may be ready for a spell in the sun again.

(This is an Upstream opinion article.)

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OPINION: Sun starts to shine again over US Gulf