BP has approved a $1.3 billion expansion at one of its oil projects in the Gulf of Mexico and discovered an additional 1.4 billion barrels at two of them, company officials said today.
“BP’s Gulf of Mexico business is key to our strategy of growing production of advantaged high-margin oil. We are building on our world-class position, upgrading the resources at our fields through technology, productivity and exploration success,” Bernard Looney, BP’s Upstream chief executive, said in a news release. “And these fields are still young – only 12 percent of the hydrocarbons in place across our Gulf portfolio have been produced so far. We can see many opportunities for further development, offering the potential to continue to create significant value through the middle of the next decade and beyond.”
The $1.3 billion Atlantis Phase 3 development is the latest example of the British oil company’s strategy of growing oil production through its existing facilities in the Gulf, he said.
BP is the operator of Atlantis and holds a 56 percent working interest, with BHP holding the remaining 44 percent. BHP is expected to make a final decision early this year on whether to proceed with the expansion.
The announcement comes amid a four-and-a-half-year offshore oil bust that has cost the Houma-Thibodaux area about 16,000 jobs. Over the past few months, several reports from economists and consultants have predicted an uptick in the Gulf this year, forecasts that hinge on how high oil prices rise above current levels of about $50 a barrel.
BP’s announcement comes a day after Danos, an oilfield service company based in Gray, said two new contracts in the Gulf prompted it to hire 150 workers.
BP’s actions come after recent the company’s recent breakthroughs in advanced seismic imaging and related technology that revealed an additional 400 million barrels of oil in place at the Atlantis field, officials said.
The same innovation helped the company find an additional 1 billion barrels oil at its nearby Thunder Horse field, officials said.
And new discoveries near BP’s Na Kika platform provide additional development opportunities, officials said.
All of the platforms are roughly 140-160 miles southeast of the Gulf’s main oilfield service hub at Port Fourchon.
BP is already the Gulf’s largest oil producer, and officials say the latest discoveries will help it grow output to about 400,000 barrels a day within the next decade.
The new projects are the latest examples of a trend in which offshore oil companies drill several deep-sea wells then transfer the oil to existing platforms then later onshore by pipeline. The so-called “tiebacks” have helped drive down the break-even cost of producing oil so companies can profit at lower oil prices but have stripped business from major employers in the Houma-Thibodaux area that build and service the platforms.
Atlantis Phase 3, which operates in 7,000 feet of water, will include the construction of a new subsea production system from eight new wells that will be tied into the current platform, the company said. Scheduled to begin producing oil next year, the project is expected to boost output by about 38,000 barrels a day at its peak. It will also access the field’s eastern reaches, where advanced imaging identified additional reserves.
“Atlantis Phase 3 shows how our latest technologies and digital techniques create real value – identifying opportunities, driving efficiencies and enabling the delivery of major projects. Developments like this are building an exciting future for our business in the Gulf,” said Starlee Sykes BP’s regional president for the Gulf of Mexico and Canada.
Proprietary algorithms developed by BP enhance a seismic imaging technique known as full-waveform inversion, company officials said. It allows seismic data that would have previously taken a year to analyze to be processed in a few weeks. The technology is what helped BP find the additional 1 billion barrels of oil beneath the seafloor at the Thunder Horse field.
Over the past five years, BP’s Gulf production has increased by more than 60 percent to more than 300,000 barrels a day.