BP’s Thunder Horse expansion begins producing
BP said Thursday it has started to produce oil from the latest expansion of its massive Thunder Horse field in the Gulf of Mexico.
The startup comes a few months before the project was originally scheduled to begin production in early 2019. The Northwest Expansion project in the Thunder Horse is expected to increase production in the field by 30,000 barrels a day, bringing total output to more than 200,000 barrels of oil equivalent daily.
The expansion is a so-called tieback project that’s popular in the Gulf of Mexico because it connects new wells to existing platforms using underwater umbilicals and pipelines. The expansions are much cheaper than building multibillion-dollar platforms at a time oil prices are at modest levels and offshore drillers must compete with companies pumping oil at lower costs from onshore shale plays.
Oil prices fell more than $1 a barrel Thursday to settle at $68.65 in New York.
“Our business in the Gulf of Mexico demonstrates our upstream strategy in action,” said Bernard Looney, BP’s upstream chief executive “Leveraging our world-class position and facilities, we are bringing new barrels online rapidly and efficiently, and uncovering more opportunities nearby. We are focused on growing value, and these projects in the Gulf are competitive with any opportunities we have worldwide.”
Activity in the offshore sector has picked up as oil prices have climbed as high as $76 a barrel before recently retreating. Oil majors have announced new discoveries, offshore drillers have merged and more offshore tracts have sold at government auctions.
The Thunder Horse platform first came online 10 years ago with the most recent South Expansion completed early last year. BP operates and owns a 75 percent stake in the project; Exxon Mobil holds the remaining 25 percent.
Even though these tieback projects are the most popular in the Gulf, BP is building one major new Gulf platform. The $9 billion Mad Dog Phase 2 platform project is under construction.