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BP Amoco Draws Up Plans for Deep-Water Pipes

BP Amoco Draws Up Plans for Deep-Water Pipes

With 1.6 billion barrels of oil reserves and an unknown quantity of deep-water natural gas reserves scheduled for production in 2003 in the Gulf of Mexico, BP Amoco is getting a little nervous about lining up some means of transportation to shore.

There currently are no pipelines in the vicinity of its new deepwater plays. The reserves are located in the southern Mississippi Canyon, the southern Atwater Valley and the Green Canyon areas of the Gulf. The company said last week it has formed a new Gulf of Mexico deep-water oil and gas transportation project team to investigate its options.

"We estimate the cost of providing the needed infrastructure to be in excess of one billion dollars," said David H. Welch, president of BP Amoco Gulf of Mexico Deepwater Development. "We are initiating this effort on a 100% BP Amoco funded basis to allow us to direct the pace of this work, giving us greater assurance that the transportation option(s) selected will be available when our new discoveries begin producing."

Jerry F. Wenzel, who has been selected to head the project team, said it would work along two tracks: one for oil and the other for gas. "We expect to develop a set of recommendations and begin execution of the project in the next year," he said.

"Our expectation is that the first segments of the system will be available for use as early as 2003 when the first of the fields under development is ready to begin production," Wenzel said.

The discoveries behind the expected production include BP Amoco's Crazy Horse, Holstien, Mad Dog, Atlantis and Nakika deep-water projects. The company currently is drilling its first appraisal well on Crazy Horse, the largest of the plays.

Rocco Canonica

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