BP approves $9B Mad Dog project, first in Gulf of Mexico since 2010 spill

|About: BP p.l.c. (BP)|By:, SA News Editor

BP says it will move ahead with its long-delayed Mad Dog project in the deepwater Gulf of Mexico, its first major new platform in the region since the 2010 oil spill disaster.

The oil giant BP says it has reduced the cost of phase 2 development to $9B, compared with an initial $20B estimate in 2013.

"It could be an indication that they are optimistic that prices will recover, but even if not, they feel confident enough to sanction a project with prices ~$50/bbl in the deepwater," says Sanford Bernstein analyst Mark Tabrett. "Around two years ago, people didn't think that was an economic level to sanction anything in deep water, so [the decision] seems like a bullish indicator for the market."

BP expects Mad Dog to begin producing oil in late 2021 and have the capacity to pump up to 140K bbl/day from up to 14 wells.