Re-engineered Mad Dog Phase 2
gets the greenlight
Standardized platform design reduces cost by about 60%
After the cost estimate of an initial de- sign reached more than $20 billion, BP, BHP Billiton, and Chevron embarked on a recycle of the Mad Dog Phase 2 project in 2013. Three years later, the
co-owners and contractors produced a simplified and standardized platform design that
reduced the overall project cost by about 60%.
In December 2016, operator BP sanctioned the
leaner $9-billion project in the deepwater Gulf
of Mexico. At that time Bob Dudley, BP Group
CEO, said: “This announcement shows that
big deepwater projects can still be economic in
a low-price environment in the US if they are
designed in a smart and cost-effective way.”
BHP and Chevron reached a final invest-
ment decision two months later. BHP ap-
proved the expenditure of $2.2 billion for its
share of the project. BP holds 60.5% working
interest along with co-owners BHP Billiton
( 23.9%) and Union Oil Company of California,
an affiliate of Chevron U.S.A. Inc. ( 15.6%).
Richard Morrison, president of BP’s Gulf
of Mexico business, said: “Mad Dog Phase 2
has been one of the most anticipated projects
in the US deepwater and underscores our
continued commitment to the Gulf of Mexico.
“The project team showed tremendous dis-
cipline and arrived at a far better and more
resilient concept that we expect to generate
strong returns for years to come, even in a
low oil price environment.”
The Mad Dog Phase 2 development plan
includes a new semisubmersible floating pro-
duction platform with the capacity to produce
up to 140,000 b/d of crude oil from 14 produc-
tion wells and inject up to 140,000 b/d of water
using a LoSal system to enhance oil recover y.
Production is expected to begin in late 2021
and be profitable at or below current oil prices.
The second Mad Dog platform will be
moored in the Green Canyon area about 6
mi ( 10 km) southwest of the existing Mad Dog
platform, which is in 4,500 ft ( 1,372 m) of water
about 190 mi (306 km) south of New Orleans.
Discovered in 1998, Mad Dog began production in 2005 from a floating truss spar facility
that is designed to produce up to 80,000 b/d of
oil and 60 MMcf/d of natural gas. Continued
appraisal drilling in the field during 2009 and
2011 doubled the resource estimate of the
field to more than 4 Bboe, spurring the need
for another platform at the field.
Speaking at a multi-disciplinary panel at
this year’s Offshore Technology Conference
in Houston, Doris Reiter, vice president, Performance Management, BP, said technology
advances in seismic data acquisition and pro-
cessing have increased the estimates of oil in
place at the Mad Dog field to 5 Bbbl.
Bill Steel, project general manager, Mad
Dog Phase 2, BP, said that the initial second
phase called “Big Dog” was an all-in strategy
that aimed to develop all the resources. He
said the reevaluation delivered a competitive
solution by incorporating value over volume,
industr y learned solutions, and collaboration.
He said the new strategy called “transformer”
aims to develop key resources not all. Phase
2 is based on the Atlantis concept. According
to Steel, two-thirds of the cost savings came
from re-engineering the floating production
system to a simplified and optimized semisubmersible production platform and using
all subsea wells; and one-third came from
industry collaboration and standardization.
According to Bob Squires, non-operated joint
venture project manager, Chevron, collabora-
tion requires willingness, objective alignment,
and transparency. He also said that successful
recycles reduce both costs and risk. Stephan
Drouaud, senior project manager, BHP Bil-
liton, added that collaboration also requires
At the beginning of the year, Samsung
Heavy Industries (SHI) won a $1.27-billion
contract to build the floating production unit.
SHI awarded Wood plc (then Wood Group)
an $80-million contract to provide detailed
engineering and procurement services for
the topsides. This followed the completion
of interim agreement period early work in
December 2016, which was valued at $4.5 mil-
lion. As part of its global services agreement
with BP, Wood Group’s Specialist Technical
Solutions business received a $4.89-million
contract for subsea engineering and project
management services. This includes gas lift
system interface design, geospatial informa-
tion system support, subsea controls engineer-
ing and geotechnical engineering support.
The Mad Dog Phase 2 development plan includes a new semisubmersible floating production platform with the capacity to produce up to 140,000 b/d of crude oil from 14 production wells.
(All images courtesy BP)