South Korea’s Samsung Heavy Industries has secured a 1.5 trillion Korean Won contract to build a semi-submersible production unit. Converted in U.S. dollars, the award amounts to almost $1.3 billion.
While Samsung did not reveal the name of the client in its announcement on Thursday, local media have reported that the client is BP, ordering the platform for the Mad Dog II project in the U.S. Gulf of Mexico.
According to Korean news agency Yonhap, this is first such deal for Samsung in a year and a half, as oil firms have slashed investments due to low oil prices.
The shipbuilder said the production facility would be able to produce 110,000 barrels of crude oil and 25 million cubic feet of natural gas a day. Delivery is expected by August 2020.
Oil giant BP sanctioned the Mad Dog Phase 2 project in the U. S. Gulf of Mexico in December 2016.
The Mad Dog 2 is an extension to the Mad Dog project in the U.S. Gulf of Mexico which has been in production since 2005 via a spar facility designed to process 80.000 barrels a day. Located offshore Louisiana, the Mad Dog field is one of BP’s largest discoveries in the area.
As the company in 2009 discovered more oil at the southern part field, it has decided to press ahead and chuck in another production facility nearby – via a project named Mad Dog Phase 2.
BP had a few years ago planned for the Mad Dog Phase 2 costs at $20 billion with a larger truss spar selected as the development concept. The company had calculated that the project would be economic at prices around $100 a barrel. The FID had been expected in 2013, with first oil in 2018.
Taking another look
However, BP and its partners Chevron and BHP Billiton then decided to take another look at those projections, and selected standardized systems instead of originally chosen bespoke solutions, slashing the expected project costs by half to around $9 billion. First oil is now expected in 2021.
Offshore Energy Today Staff