BP plc and partners are reviewing their plans for the second phase of the Mad Dog field development in the U.S. Gulf of Mexico as current market conditions and industry inflation have made the current development scheme less attractive.
BP, Chevron Corp. and BHP Billiton Petroleum are reviewing the existing plans and other options in evaluating how to develop the project, BP's largest greenfield development in the U.S. Gulf in a decade and one of the world's largest spars.
However, BP told Rigzone it fully intends to develop the Mad Dog Phase 2 resources and is committed to moving forward with the right plan.
"It is too early to speculate when the details of the final plan will be approved by BP and its co-owners," a BP spokesperson said in an email statement.
The current plans for Mad Dog Phase 2 include a spar floating system with infield flow lines and associated subsea infrastructure to connect the subsea production and injection wells. The project also includes export pipelines connected to the existing Mardi Gras system.
The spar will have production capacity of 130,000 barrels of oil per day, 75 million cubic feet per day of total compression, and water injection capacity of 280,000 barrels per day (bopd) for waterflood of western and southern field segments. Water injection capacity can be expanded to 350,000 bopd to accommodate future injection requirements.
The development concept includes 33 wet wells, 19 production and 14 injection wells.
BP is operator of Mad Dog Phase 2 with 60.5 percent working interest. BHP Petroleum holds 23.9 percent interest and Chevron owns 15.6 percent.
Mad Dog Phase 2 was one of seven projects BP anticipated would be in the post-final investment decision stage in the 2015-2020 timeframe. BP expected to kick off construction of the Mad Dog 2 infrastructure around the end of 2013, according to a BP December 2012 presentation.
Mad Dog Phase 2 is one of 11 BP megaprojects that will each require a gross investment of over $10 billion. Located in the southern Green Canyon area of the U.S. Gulf in water depths of 4,500 to 6,800 feet (1,372 to 2,073 meters), Mad Dog is estimated to contain reserves ranging from 200 to 450 million barrels of oil equivalent.
The company reported late last year it was on track to deliver 15 projects from 2012-2014. BP started up three of those projects in 2012, including the Galapagos project in the U.S. Gulf, Clochas Mavacola in Angola and Devenick in the North Sea.