BP expecting tick for US Mad Dog oil project with BHP
After abandoning Australian plans, BP says approval is imminent for its Mad Dog US oil project with BHP.
BP says approval for the big Mad Dog 2 oil project in the Gulf of Mexico it owns with BHP Billiton is imminent and that costs have come down significantly from the previous $US10 billion estimate.
The US investment comes in the wake of BP’s sudden decision last month to walk away from its $1bn-plus plans to drill Australia’s most anticipated oil exploration wells in more than a decade, in the Great Australian Bight.
BP finance director Brian Gilvary told investors overnight that Mad Dog, in which BHP has a 23.9 per cent stake, would be approved this quarter.
“It’s imminent,” Mr Gilvary said.
“We’re right mostly ready to make a final investment decision (this quarter). I think our partners are likely to do that in the first quarter next year ... but I think the project is pretty much there now.”
BP went back to the drawing board on the long-studied Mad Dog 2 after an original study showed project costs of $US20bn, bringing expected development down to about $US10bn in recent years.
“It’s certainly below the $10 billion that we talked about. And now, it’s sort of drifting to a number significantly below that as well. So, I think that’s ready to go, “Mr Gilvary said.
He said the Bight wells, for which a special rig had been finished and BP was set to drill this year didn’t stack up.
“Ultimately, that was not commercial for the company,” Mr Gilvary said.
“The Great Australian Bight simply didn’t work, and, on that basis, we stepped away.”
