BHP Billiton has approved expenditure of $2.2 billion for its share of the development of the Mad Dog Phase 2 project in the U.S. Gulf of Mexico.
BHP Billiton holds a 23.9 percent participating interest in the Mad Dog field.
BP, the operator, holds a 60.5 percent participating interest, and Union Oil Company of California, an affiliate of Chevron U.S.A. Inc., holds the remaining 15.6 percent participating interest.
BP discovered the Mad Dog field in 1998 and began production there with its first platform in 2005. Continued appraisal drilling in the field during 2009 and 2011 doubled the resource estimate of the Mad Dog field to more than 4 billion barrels of oil equivalent, spurring the need for another platform at the field.
During the fourth quarter of 2016, BP sanctioned the Mad Dog Phase 2 project.
Mad Dog Phase 2, located in the Green Canyon area in the Deepwater Gulf of Mexico, is a southern and southwestern extension of the existing Mad Dog field. The project includes a new floating production facility with the capacity to produce up to 140,000 gross barrels of crude oil per day from up to 14 production wells. Production is expected to begin in the 2022 financial year.
Steve Pastor, BHP Billiton President Operations Petroleum, said “Mad Dog Phase 2 is one of the largest, discovered and undeveloped resources in the Gulf of Mexico, one of BHP Billiton’s preferred conventional deep-water basins.
“It offers an attractive investment opportunity for BHP Billiton and aligns with our strategic objective to build our conventional portfolio through the development of large, long-life, high-quality resources.”