BHP Billiton's board has approved to spend US$2.2 billion for its share of BP's Mad Dog Phase 2 development costs in the US Gulf of Mexico.
 |
|
Image of Mad Dog, from BP. |
The project is one of the largest, discovered and undeveloped resources in the Gulf of Mexico, according to BHP, which holds a 23.9% participating interest in the Mad Dog field.
BP sanctioned the US$9 billion Mad Dog Phase 2 investment on 1 December, last year, ahead of BHP having given its board approval.
Mad Dog Phase 2, in the deepwater Green Canyon area, will include a new floating production platform with the capacity to produce up to 140,000 gross bo/d from up to 14 production wells.
Mad Dog Phase 2 is a southern and southwestern extension of the existing Mad Dog field, which will be moored about 6mi to the southwest of the existing Mad Dog platform, which is located in 4500ft water depth, some 190mi south of New Orleans.
First production is set to start 2022, says BHP. In December, BP orgininally said said first production was set for late-2021.
Steve Pastor, BHP Billiton president operations petroleum, said: “Mad Dog Phase 2 is one of the largest, discovered and undeveloped resources in the Gulf of Mexico, one of BHP Billiton’s preferred conventional deep-water basins. It offers an attractive investment opportunity for BHP Billiton and aligns with our strategic objective to build our conventional portfolio through the development of large, long-life, high-quality resources.”
Mad Dog was first discovered in 1998. Production began with its first platform in 2005. Continued appraisal drilling in the field during 2009 and 2011 doubled the resource estimate of the Mad Dog field to more than 4 billion boe, spurring the need for another platform at the field.
The current Mad Dog platform has the capacity to produce up to 80,000 bbl (gross) and 60 MMcf/d of natural gas (gross).
In 2013, BP and its partners decided to re-evaluate the Mad Dog Phase 2 project after an initial design proved too complex and costly. BP has worked with co-owners and contractors since then to simplify and standardize the platform’s design, reducing the overall project cost by about 60%. Today, the leaner $9 billion project, which also includes capacity for water injection, is projected to be profitable at or below current oil prices.
BP is the operator of Mad Dog with 60.5% stake, with Chevron holding the remaining 15.6%.
Read more:
Subscribe
