BHP Billiton in early February said that its board approved expenditure of $2.2 billion for its share of the development of the Mad Dog Phase 2 project off the coast of Louisiana in the 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. During 4Q16, 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. According to BHP Billiton, 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, the company 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,” Steve Pastor, BHP Billiton President Operations Petroleum, said in a statement. “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.”