British oil major BP has approved the $9 billion Mad Dog Phase 2 project in the deepwater of the Gulf of Mexico, according to the company statement released Thursday.
The Mad Dog Phase 2, one of BP’s largest discoveries in the Gulf of Mexico to date, includes a new floating production platform with capacity to produce up to 140,000 gross barrels of crude oil per day from up to 14 production wells.
BP, together with co-owners BHP Billiton and Union Oil Company of California, an affiliate of Chevron U.S.A. Inc., have long been evaluating the project in terms of its complexity and cost, and now the company has reduced the overall project cost by about 60 percent, the statement highlighted.
"This announcement shows that big deepwater projects can still be economic in a low price environment in the U.S. if they are designed in a smart and cost-effective way," Bob Dudley, BP group chief executive, was quoted as saying in the statement.
"BP discovered the Mad Dog field in 1998 and began production there 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 barrels of oil equivalent, spurring the need for another platform at the field," the statement read.
The current Mad Dog field has the capacity to produce up to 80,000 gross barrels of oil and 60 million gross cubic feet of natural gas per day.
Oil production from Mad Dog 2 is expected to begin in late 2021.
(Anadolu Agency)
