BP plans to press ahead with a major deep water project in the Gulf of Mexico off the Louisiana coast, The Wall Street Journal reports.
The decision to move ahead with the long-delayed project to expand production from the Mad Dog oil field is the latest evidence oil companies are tentatively wading back into big-ticket projects amid signs a two-year crude market slump is ending.
For years, BP and its partners struggled to bring down costs, contending first with high industry inflation in the boom years before 2014, and then with a catastrophic slump in oil prices.
The oil giant says it had reduced the cost of Mad Dog phase 2—as the project is known—to $9 billion, compared with $20 billion in 2013.
“Some people say that deep water is finished,” Bernard Looney, BP’s head of exploration and production, said in a presentation this summer. “We have a very different view.”
The decision to move ahead with Mad Dog phase 2 came a day after the Organization of the Petroleum Exporting Countries said its members would curb oil output. Crude prices have soared over 14% since the deal, with Brent crude, the international benchmark, hitting $54.50 in London trading this afternoon.
