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IEA: Oil Prices To Hit A Ceiling In 2018

IEA: Oil Prices To Hit A Ceiling In 2018

Global oil markets appear to…

BP Ups Investment in Gulf of Mexico as Oil Prices Continue Recovery

Offshore Drilling

British Petroleum will be pursuing a $9 billion underwater drilling project in the Gulf of Mexico, after securing a go-ahead from the United States government for the development, according to a new report by The Chemical Engineer.

The Mad Dog field, which BP discovered 300 kilometers off the coast of New Orleans in 1998, began production in 2005. Currently, the field produces 80,000 barrels per day, but the site is expected to hold four billion barrels of oil equivalent.

The second phase of the project will lead to the creation of another floating production platform in 1,400-meter-deep waters.

The new wing will sit 9.5 kilometers away from the first phase’s platform and is slated to pump out 140,000 barrels per day from 14 wells beginning at the end of 2021.

BP owns a 60.5 percent stake in the project, while BHP Billiton holds a 23.9 percent share and Chevron’s Union Oil Company of California holds 15.6 percent.

In 2013, the consortium decided the plans would be too expensive to remain feasible, leading project leaders to amend the design to reduce costs by 60 percent – which made construction possible even after oil prices fell in 2014.

“Mad Dog Phase 2 has been one of the most anticipated projects in the US deepwater and underscores our continued commitment to the Gulf of Mexico,” Richard Morrison, who heads BP’s Gulf of Mexico activities, said.

Related: Non-OPEC Producers To Cut An Additional 600,000 Bpd Next Week?

“The project team showed tremendous discipline and arrived at a far better and more resilient concept that we expect to generate strong returns for years to come, even in a low oil price environment.”

BP recently became a qualified bidder to work on portions of Mexico’s Trion field, which is thought to require nearly $11 billion in investments and will be developed jointly with Mexico’s state-run oil conglomerate, Pemex.

The Trion field is located in the Perdido Ford Belt in the Gulf of Mexico, near the US-Mexico border, and is thought to hold 485 million barrels of oil equivalent.

By Zainab Calcuttawala for Oilprice.com

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