• 4 minutes US-backed coup in Venezuela not so smooth
  • 7 minutes Why Trump will win the wall fight
  • 11 minutes Oil imports by countries
  • 13 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 15 hours Climate Change: A Summer of Storms and Smog Is Coming
  • 14 hours Tension On The Edge: Pakistan Urges U.N. To Intervene Over Kashmir Tension With India
  • 14 hours The Quick Read On MBS's Tour of Pakistan, India And China
  • 13 hours Teens For Climate: Swedish Student Leader Wins EU Pledge To Spend Billions On Climate
  • 15 hours Iran Starts Gulf War Games, To Test Submarine-Launched Missiles
  • 16 hours Venezuela: Nicolas Maduro closes border with Brazil
  • 14 hours BMW to add 2,000 more jobs at Dingolfing plant
  • 1 day Amazon’s Exit Could Scare Off Tech Companies From New York
  • 1 day Itt looks like natural gas may be at its lowest price ever.
  • 17 hours Saudi A to Splash $100 Bln on India
  • 10 hours Washington Eyes Crackdown On OPEC
  • 12 hours Indian Oil Signs First Annual Deal For U.S. OilIndian Oil Signs First Annual Deal For U.S. Oil
  • 1 day NEW FERUKA REFINERY
Flurry Of Bullish News Boosts Oil Prices

Flurry Of Bullish News Boosts Oil Prices

Oil prices reached 2019 highs…

Rising Costs Force BP to Re-Evaluate $10 Billion Gulf of Mexico Project

Industry-wide, rising development costs have forced BP to re-evaluate its $10 billion oil project in the Gulf of Mexico.

The Mad Dog 2 development was set to become BP’s largest new oil project in the Gulf of Mexico for over a decade. Construction was expected to begin this year with the first oil pumped before 2020, but the rising costs have now made this plan difficult to justify, and the company has had to return to the drawing board to come up with a new plan, which will most likely involve a delay of a year or so.

The oil field at Mad Dog 2 is estimated to contain four billion barrels of oil equivalent. The project will see a second platform constructed on the field, linked to 33 new subsea wells which will extract the oil.

Related article: Finding Good Investments in Areas with Growing Oil Production

BP released a statement to explain that “the current development plan for Mad Dog Phase 2 is not as attractive as previously modelled, due largely to market conditions and industry inflation.

BP fully intends to develop the resources at Mad Dog Phase 2 and is committed to moving forward with the right plan. It is too early to speculate when the details of the final plan will be approved by BP and its co-owners.”

Increasing costs have also led other companies to abandon projects in the energy sector. Woodside Petroleum has had to rethink initial plans to build a $45 billion liquefied natural gas plant in Western Australia due to large cost over-runs. And France’s Total has had to abandon a multibillion dollar oil sands project in Canada after the venture became economically unviable.

By. Charles Kennedy of Oilprice.com



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News