Updated Nov. 11, 2013 4:19 p.m. ET  After the Deepwater Horizon oil spill in the Gulf of Mexico in 2010, the largest in U.S. history, there was a lot of talk about the possibility of offshore drilling being scaled back.  Instead, the opposite has happened. Since the moratorium imposed on deep-water drilling in the U.S. in May 2010 was lifted in October of that year, offshore exploration and drilling in the Gulf of Mexico has continued uninterrupted and taken on new momentum, as it has around the world. Today, deep-water drilling—500 feet or more below the surface of the sea—remains the next big frontier for oil and natural-gas production.  Some environmentalists have expressed concerns that expanded offshore drilling poses new risks of spills and other damage to the environment. "We still don't know all the impact of the Deepwater Horizon spill on the ecosystem," says Sean Dixon, a water-policy attorney at environmental-protection group Clean Ocean Action in Highlands, N.J. "And all the other options, such as energy efficiency and conservation, haven't been fully investigated." So, he says, it's not wise "to seek more fossil fuels through deep-water drilling when it could have such deleterious consequences for the environment."  But energy companies say new technologies are making drilling safer for both the environment and their workers, and they are pouring millions of dollars into the development of new production techniques that they expect to increase the efficiency of drilling in deep water and open up new areas for production.  The push into deep water is being spurred in part by heightened political uncertainty in the oil-producing regions of Africa and the Middle East.  "As they encounter increasing difficulties in accessing new conventional reserves, [international oil companies] are turning to more-complex developments like the deep offshore," French oil research institute IFP Energies nouvelles wrote in a report last year. "A consistently high price per barrel for oil enables producers to justify the most advanced, and therefore most costly, technologies required to bring fields into production."  According to Norwegian oil and gas consultants Rystad Energy AS, deep-water production is expected to account for 13% of the global output of crude oil and natural-gas condensates by 2020, up from 10% last year.  In the U.S., offshore oil production from the lower 48 states, mostly in the Gulf of Mexico, is expected to grow 18% from its 2011 level by 2020, thanks to exploration as deep as 5,000 feet, according to the U.S. Department of Energy.  Leading energy companies including Chevron Corp. CVX -0.09% Chevron Corp. U.S.: NYSE $121.08 -0.11 -0.09% Nov. 11, 2013 4:00 pm Volume (Delayed 15m) : 3.39M AFTER HOURS $121.08 0.00 0.00% Nov. 11, 2013 5:57 pm Volume (Delayed 15m): 41,206 P/E Ratio 9.84 Market Cap $233.07 Billion Dividend Yield 3.30% Rev. per Employee $3,588,150 11/01/13 Chevron Pumps Up Its Spending 11/01/13 The Race for Oil, and Chevron'... 10/30/13 Chevron, Judges and Money More quote details and news » CVX in Your Value Your Change Short position , Statoil AS STL.OS +0.78% Statoil ASA Norway: Oslo kr141.30 +1.10 +0.78% Nov. 11, 2013 4:25 pm Volume : 1.66M P/E Ratio 11.81 Market Cap kr447.05 Billion Dividend Yield 4.78% Rev. per Employee kr27,143,300 11/11/13 Offshore Oil Drilling Takes Of... 09/26/13 Statoil Makes Oil Find Offshor... 09/12/13 Statoil Questions Reliance on ... More quote details and news » STL.OS in Your Value Your Change Short position A and BP BP.LN 0.00% BP PLC U.K.: London GBp481.15 0.00 0.00% Nov. 11, 2013 4:35 pm Volume : 0 P/E Ratio 5.94 Market Cap GBp89.64 Billion Dividend Yield 4.92% Rev. per Employee GBp2,864,460 11/11/13 Offshore Oil Drilling Takes Of... 11/06/13 BP to Give Up Control of Libya... 11/01/13 BP Names Michael Gibbs CIO More quote details and news » BP.LN in Your Value Your Change Short position PLC are investing heavily in new technology, along with less prominent names. Among the latter, Norwegian oil-services company WeST Drilling Products AS, a unit of WeST Group, has created a robotic oil rig that it says will reduce drilling time by up to 50% and drastically reduce the safety risk of drilling by taking most of the people out of the process.  As they drill deeper, energy companies are developing new technologies to find oil and gas under barriers like the thick layers of salt found in some of the world's most promising offshore fields. BP estimates that in the Gulf of Mexico, 80% of the area's future oil and gas reserves may lie beneath this layer. Chevron has developed proprietary seismic-imaging technology, relying on the latest advances in analytical software and investments in massive computing power, that it says gives it a much clearer picture of what lies beneath the sea floor.  BP is developing a set of new deep-sea technologies called Project 20KTM that it aims to deploy by 2020. The goal is to enable safe exploration at pressures as high as 20,000 pounds per square inch and temperatures as high as 350 degrees Fahrenheit, which would allow the company to drill much deeper than it can now. Pressure and temperature increase as you drill deeper, and the current technical limits for drilling are 15,000 pounds per square inch of pressure and a temperature of 250 degrees Fahrenheit.  BP estimates the new technology could give it access to the equivalent of an additional 10 billion to 20 billion barrels of oil overall in the U.S., Azerbaijan and Egypt. The technology also will include enhanced safety features such as real-time, continuous monitoring of a rig's blowout preventer—the equipment that stops the accidental escape of natural gas during drilling. The failure of that equipment contributed to the Deepwater Horizon disaster.  Meanwhile, Statoil is building a subsea compressor to boost its natural-gas production. Compressors sustain the pressure needed to pump gas from reservoirs. The company says the new compressor will be friendlier to the environment and safer than the sea-surface compressors currently in use and will allow the company to tap fields that currently can't be reached.  Carrying out compression closer to the reservoirs will increase production and cut carbon emissions by about half, according to Statoil, and unmanned subsea compressors will be safer than current surface compressors, which require a staffed platform. Subsea compression also will allow production beneath the Arctic ice cap, Staoil says, since no surface platform is needed.  Mr. Faucon is a Wall Street Journal staff reporter in London. Email: benoit.faucon@wsj.com.
Despite predictions of retrenchment after BP's huge spill in 2010, deep-water drilling is the industry's next big frontier.