BHP Billiton Board Signs Off on Investment in BP's Mad Dog Project
February 09 2017 - 2:53AM
Dow Jones News
By Rhiannon Hoyle
SYDNEY--BHP Billiton Ltd. (BHP.AU) said its board had signed off
on a $2.2 billion investment for its share of a major deep-water
project in the Gulf of Mexico led by BP PLC (BP.LN).
U.K. oil major BP in December announced plans to press ahead
with a project to expand production from the Mad Dog oil field,
located off the coast of Louisiana, which it operates and in which
it holds a 60.5% interest.
On Thursday, Anglo-Australian mining company BHP Billiton, which
has a 23.9% stake in the field, said its board has approved
spending for its portion of the Mad Dog Phase 2 project.
The remaining 15.6% interest in the field is held by Chevron
Corp. (CVX) unit Union Oil Co. of California.
BHP has been shifting its investment focus to the petroleum
sector, betting oil-and-gas markets will improve more quickly than
other commodities such as iron ore. It forecasts that demand growth
and natural field decline will support a recovery in oil prices in
coming years.
The advancement of the major project, estimated to have a total
cost of $9 billion, is the latest evidence oil companies are
tentatively wading back into big-ticket projects following a
downturn in global energy markets.
"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," said Steve Pastor, BHP's
president of petroleum operations. "It offers an attractive
investment opportunity for BHP Billiton and aligns with our
strategic objective to build our conventional portfolio," he
said.
The second phase of Mad Dog, which is expected to begin
production in late 2021, would add the capacity to pump an extra
140,000 barrels a day to a project currently producing about 80,000
barrels a day of oil and about 60 million gross cubic feet of
natural gas. The project involves installing a floating production
facility about 6 miles from the existing platform.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
February 09, 2017 02:38 ET (07:38 GMT)
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