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.
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