Samsung Heavy Industries (SHI) has won the first offshore drilling project for Korean shipbuilders in 18 months, with an order for BP's Mad Dog II project in the US Gulf of Mexico.
The US$1.27 billion order is for a floating production unit (FPU) weighing 58,000-ton or above, with 110,000 b/d and 25 MMcf/d gas capacity.
While SHI didn't name the client or project in its announcement, the order has been widely attributed to BP's Mad Dog II.
Last month, BP sanctioned the US$9 billion Mad Dog Phase 2 project, with first production set to start in late-2021.
At the time, the UK-based supermajor said the project would include a new floating production platform with the capacity to produce up to 140,000 b/d of crude (gross) from up to 14 production wells.
Mad Dog, one of company’s largest discoveries in the Gulf of Mexico to date, was discovered in 1998. Production began with its first platform in 2005. Continued appraisal drilling in the field during 2009 and 2011 doubled the resource estimate of the Mad Dog field to more than 4 billion boe, spurring the need for another platform at the field.
BP said that the second Mad Dog platform will be moored about 6mi to the southwest of the existing Mad Dog platform, which is located in 4500ft water depth, some 190mi south of New Orleans.
The current Mad Dog platform has the capacity to produce up to 80,000 bbl (gross) and 60 MMcf/d of natural gas (gross). BP plans to add some 800,000 boe/d (net) of new production globally from projects starting up between 2016 and 2020.
While BP has reached a final investment decision (FID) on Mad Dog Phase 2, its co-owners, BHP Billiton and Union Oil Co. of California, an affiliate of Chevron USA Inc., are expected to make a final investment decision in the future.
In 2013, BP and its partners decided to re-evaluate the Mad Dog Phase 2 project after an initial design proved too complex and costly, at around $20 billion. Today, the leaner $9 billion project, which also includes capacity for water injection, is projected to be profitable at or below current oil prices.
Meanwhile, Korean news agency Yonap said SHI was also likely to win an additional offshore facility deal, named by another as a floating liquid natural gas (LNG) platform for Eni in Mozambique, through a consortium with France’s Technip and Japan’s JGC.
Image: Mad Dog II floater. Image from BP.