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

There currently are no pipelines in the vicinity of its newdeepwater plays. The reserves are located in the southernMississippi Canyon, the southern Atwater Valley and the GreenCanyon areas of the Gulf. The company said last week it has formeda new Gulf of Mexico deep-water oil and gas transportation projectteam to investigate its options.

“We estimate the cost of providing the needed infrastructure tobe in excess of one billion dollars,” said David H. Welch,president of BP Amoco Gulf of Mexico Deepwater Development. “We areinitiating this effort on a 100% BP Amoco funded basis to allow usto direct the pace of this work, giving us greater assurance thatthe transportation option(s) selected will be available when ournew 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 forgas. “We expect to develop a set of recommendations and beginexecution of the project in the next year,” he said.

“Our expectation is that the first segments of the system willbe available for use as early as 2003 when the first of the fieldsunder development is ready to begin production,” Wenzel said.

The discoveries behind the expected production include BPAmoco’s Crazy Horse, Holstien, Mad Dog, Atlantis and Nakikadeep-water projects. The company currently is drilling its firstappraisal well on Crazy Horse, the largest of the plays.

Rocco Canonica

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