The second phase of BP’s Mad Dog project in the Gulf of Mexico is expected to start production in 2020, according to a report by GlobalData.
Entitled 'US Offshore Deepwater Gulf of Mexico Mad Dog Phase 2 Project Panorama – Oil and Gas Upstream Analysis Report', the report provides complete details of the Mad Dog asset and its production profile.
Mad Dog is estimated to contain four billion barrels of oil equivalent. The first phase of development of the project started in 2005 and is currently producing 35,000bpd of oil. BP was granted approval for phase two development of the field by the US Bureau of Ocean Energy Management in 2015.
The second phase was originally planned to be developed using a spar designed by Technip, similar to the one used in phase one development. However, the plan was scrapped in 2013 due to rising cost estimates at $22bn.
The new development plan includes use of a semi-submersible floating production platform, and is estimated to cost $14bn. The semi-submersible platform will be installed in 4,400ft of water in Green Canyon Block 780 and will have a processing capacity of 140,000bpd of oil.
KBR was awarded the contract for the design of the semi-submersible platform in 2014. BP announced its plans to re-tender the engineering, procurement and construction contract for the semi-submersible platform in March 2016.
The project is expected to benefit from the existing low-cost environment, which is estimated to further reduce the price of the project. BP has estimated a net present value of $1.1bn and an internal rate return of 14.6% for the project. The company plans to drill 24 wells, comprising 14 producing oil and gas, and ten water injectors.