BHP Billiton has agreed to provide $708 million in pre-commitment funding for phase two of the BP plc-operated Mad Dog project in the deepwater Gulf of Mexico (GOM).
BP, which has a 60.5% stake in the gargantuan project, was given the green light by company officials in February (see Daily GPI, Feb. 8). BP already has committed $1.8 billion to fund its share of the extension. BHP has a 23.9% interest, while Chevron Corp. holds a 15.6% stake. Funding by the partners would be used for detailed engineering, and to procure long lead-time items related to the hull, topsides and subsea equipment.
When BP sanctioned the second spar platform, CEO Bob Dudley said the “major new gas field” would be “one of the largest new free-standing developments” in the GOM. The new spar is to be installed on the southern extension of the field and capable of producing 120,000-140,000 boe/d.
Pre-Macondo, BP was the top GOM producer, and Mad Dog, discovered in 2005 in Green Canyon Block 782 field, long has been one of its top prospects. Last year, following successful drilling in an untested segment of the Mad Dog field, BP said the field’s size likely was double previous estimates, with total hydrocarbons in place of at least 4 billion boe (see Daily GPI, Sept. 8, 2011).
Up to 150 drilling and production personnel operate phase one of Mad Dog, which was designed to drill and produce from at least 12 wells simultaneously. The field initially ramped up using a truss spar platform that was designed to process up to 60,000 MMcf/d of gas and up to 100,000 b/d of oil. By comparison, BP’s Thunder Horse facility in the GOM, currently the largest deepwater production unit in the world, has capacity to process up to 200 MMcf/d of gas and 250,000 b/d of oil.
A final decision to move forward with the second phase of Mad Dog is to be made by the partners in 2013; if the partners commit, production ramp up is scheduled for 2018.
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