It is with some pride that Marvin Odum, the president of Shell Oil and director of its upstream business in the Americas, talks about the rapid pace at which his company is reaching new depths in the Gulf of Mexico. “More people have walked on the moon than have been at the depths we’re exploring,” he boasts.

Since Shell extracted its first oil in the area in 1949, technology has progressed in leaps and bounds. World water-depth records for drilling have been repeatedly broken, and a wave of new developments mean that production in the Gulf is expected to reach its highest-ever level by 2016. The company is currently working on plans to open a well in 9,500ft of water – a depth which has previously been unreachable.

Indeed, with estimations that the world’s population could grow to 9bn by 2050 – the equivalent of a new city of 1.4m people being added each week – the oil industry shows no signs of slowing. “That’s the type of energy growth that we’re facing in society,” Odum tells The Telegraph.

“In deepwater, we’re working across the world, primarily in the Gulf of Mexico. We’re expanding into Brazil, with a couple of platforms down there producing, and we’ve signed on to what could be a significant development called Libra.

“We operate in two primary growth areas. One of those is integrating gas, liquefied natural gas, chemicals and those kind of projects, and the other category is deepwater. So this is one of the major growth areas for Shell as a company.”

In February, after years of development and construction, the FTSE 100 oil giant opened its new Olympus tension leg platform in the Gulf of Mexico. The rig – a further development of the Mars field, which is one nautical mile away – will generate up to 100,000 barrels of oil per day when it reaches peak capacity in 2016.

It is an impressive feat of engineering, with over 10,600 individual cables totalling more than 190 miles in length. The rig – which is expected to run until at least 2050 – houses six turbine generators which can produce enough power for 18,000 houses. The project has so far created 20,000 jobs in the US and Europe alone.

“It looks like a little dot in the ocean when you’re flying over it in a helicopter, but once you land and start walking around this piece of machinery you recognise what a size it really is,” Odum explains. “There’s quite a production story to be told here over time.”

But standing on the platform – Shell’s sixth-largest tension leg project – Odum, in full fluorescent gear, is keen to emphasise that when it comes to safety, there are no compromises.

“It’s the most important thing that we deal with out here and it’s always front of mind for us,” he explains.

Indeed, safety is top of the agenda for most energy operators in the Gulf of Mexico. Four years ago, in April 2010, BP’s Deepwater Horizon drilling rig dramatically exploded, combusted and sank into the ocean at the Macondo well, 41 miles off the coast of Louisiana, killing 11 crew members.

This was followed by an 87-day spill, during which an estimated 4.9m barrels equivalent of oil gushed from the uncapped well, creating a lasting impact on the Gulf Coast’s economy, environment and sparking greater regulation of the petroleum industry.

“It was a devastating time for the industry, and from the position where I was sitting it was not hard to see the implications of what it could mean,” Mr Odum says. “The day the rig sank, I was in a helicopter flying out to the Perdido platform. As someone who’s grown up in the area, who has worked in this part of the world and in this part of the business for decades, it was a pretty devastating event that hit very close to home.”

To this day, BP continues to count the cost as it settles billions of dollars of claims arising from the disaster. Its cumulative costs from the spill reached $42.7bn (£25bn) at the end of 2013.

But it was not just BP that was hit by the crisis. The entire oil industry faced growing public contempt and demands for a safety crackdown by a White House panel that delivered the scathing verdict that the industry’s regulatory system was “entirely unprepared” for a disaster.

In 2011, the White House oil spill commission recommended in its final report that the US government should expand its drilling regulations and set up an independent agency to monitor safety.

The findings were a blow to oil companies operating in the Gulf which faced an increase in costs to deal with the new rules, and the American Petroleum Institute criticised the panel’s report for casting doubt on the entire oil industry based on a single accident.

“A lot of what was in the new regulations we were already doing,” Mr Odum explains.

“However, some regulation did cause changes – for example, our blowout preventers are tested more frequently, and the decision was made that at any point in time when we’re drilling a well, we have to be able to cap it off or shut it in.”

Shell also has a real-time operations centre, which monitors activity 24 hours per day, and “The Bridge”, a monitoring room staffed by experienced engineers poring over 700m data points every day.

Despite the difficulties faced by the industry after the Deepwater Horizon spill, Odum says that the focus for Gulf petroleum firms was on helping BP to recover after the accident.

“We could all sense that there would be a negative impact on the public credibility of the industry,” he explains, “but the first reaction and response from all of the companies here was, ‘How can we help?’ This was not unique to Shell – there was a call to BP from everyone asking if they needed any equipment, people, or anything else to help them through this. That’s the side that the public didn’t see.”

Shell’s training facilities in Robert, Louisiana, were handed over to BP for use as a command centre during the incident response.

“The public saw a lot of interviews and a lot of ‘Why do you think this happened and why did it happen to them?’ but they didn’t see what was happening behind the scenes, which was everybody trying to fix this problem – the spirit of ‘What can we do to help you and how can we all work on this problem to solve it together?’ ” Odum added.

Shortly after the accident, Barack Obama, the US president, imposed a six-month ban on all drilling operations on the US coast. But in an extraordinary sign of confidence, it was four months into the moratorium, in September 2010, that Shell took the final investment decision on Olympus.

So far, the company’s bullishness has proved successful – first oil was struck six months ahead of schedule, and the rig is on track to meet its 100,000 barrels of oil per day equivalent peak target.

However, an increase in equipment testing has had an inevitable cost impact, which Odum admits is significant.

Combined with general inflation, the overall increase in cost has been up to 25pc. However, he still believes that deepwater is a viable – and profitable – prospect.

He adds: “I think it’s fair to say that we do have a competitive advantage in the deepwater, based on our history, capabilities and track record. In the Gulf of Mexico, we have more infrastructure than any of our competitors, and I think our ability to overcome the technical barriers that exist in these projects and develop these projects in a way that have a strong return and a value adding to the portfolio differentiates us from others.”

But the key question for Shell is how much deeper they can go, and also how much further they really need to go. New technology provides better subsurface imaging, assisting in the detection of oil closer to the shore.

“There’s how far can you go in terms of further out and deeper, but there’s also the question of how much more can you find just by being able to image it, which might even bring in more oil but shallower,” Odum explains. “One of our goals is certainly to maximise the existing infrastructure that is in place.”

John Hollowell, the company’s executive vice-president for deepwater in the Americas, admits that he is uncertain about how much deeper the company will drill.

“It’s a difficult question to answer,” he says. “When I came on-board in 1980, people were saying, ‘Boy, it’s too bad you came here in such a sunset time for the offshore industry’, and they were convinced that we’d essentially gone as far as we could. Now, we’ve got a well construction in 9,500ft of water.

“How far you can go is really technology based. When we can’t overcome the technical barriers, that will be the end, but we have yet to reach that stage.”

“The will of the people to make it happen is also an important component of deepwater. Some people associate it with landing on the moon of sorts.”

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/10978245/Shell-drills-deeper-in-the-Gulf-of-Mexico-to-meet-demand.html