BP cheers first oil from its new deepwater Gulf of Mexico platform

UK-headquartered energy giant BP has kicked off oil production from its fifth operated production platform in the U.S. Gulf of Mexico and the first new one since 2008 when Thunder Horse came online. This platform is the crown jewel in the project bestowing a new lease of life on the super-giant Mad Dog oil field.

BP disclosed on Thursday, 13 April 2023, that it had started oil production at its Argos semi-submersible offshore platform, delivering more energy at “a critical time” and strengthening its position as “a leading producer” in the deepwater U.S. Gulf of Mexico. With a gross production capacity of up to 140,000 barrels of oil per day, Argos will increase the firm’s gross operated production capacity in the Gulf of Mexico by an estimated 20 per cent.

Bernard Looney, BP’s chief executive, remarked: “The start-up of Argos is a fantastic achievement that helps deliver our integrated energy strategy – investing in today’s energy system and, at the same time, investing in the energy transition. As BP’s most digital facility worldwide, applying our latest technologies, Argos will strengthen our key position in the Gulf of Mexico for years to come.”

BP expects to safely and systematically ramp up production from Argos through 2023. This project reflects the UK player’s strategy of investing in high-quality oil and gas projects, “helping to deliver the energy the world needs today while also investing in energy for tomorrow.” According to the company, Argos is the centrepiece of its Mad Dog Phase 2 project, which extends the life of the super-giant oil field discovered in 1998.

The Mad Dog oil field started production with its first platform in 2005 while further appraisal drilling doubled the resource estimate of the field to more than 4 billion barrels of oil equivalent, spurring the need for another platform. As a result, the $9 billion Mad Dog Phase 2 project was sanctioned by BP in December 2016 and by its partners BHP, now Woodside, and Chevron in February 2017.

Initially, the first oil production was expected to start in late 2021 with the second platform moored six miles to the southwest of the existing Mad Dog platform, which is located in 4,500 feet of water about 190 miles south of New Orleans. The first Mad Dog platform has the capacity to produce up to 80,000 gross barrels of oil and 60 million gross cubic feet of natural gas per day.

Following a contract award from early 2017, the construction of the 60,000-ton Mad Dog 2 platform started in March 2018 at the Samsung Heavy Industries yard in South Korea and was completed and delivered to BP in February 2021. Following a 16,000-mile journey from South Korea on board Boskalis’ BOKA Vanguard vessel, the platform arrived at the Kiewit Offshore Services fabrication yard in Ingleside, Texas in April 2021 to undergo final preparatory work and regulatory inspections before heading offshore.

After a pre-production inspection was conducted in mid-May 2021 by BSEE, the platform was then towed to its final location in the Gulf of Mexico in September 2021. At that time, it was expected that production would start in the second quarter of 2022. However, issues were reported related to the project within BP’s report for the second quarter of 2022, where the company shared that the hook-up and commissioning programme of the Mad Dog Phase 2 Argos platform topsides was proceeding to plan, with a wells campaign nearing completion.

In addition, the UK giant underscored that an issue with two of the subsea production flexible joints was detected during testing, which delayed the original timeline for the first oil. The Argos platform will produce through a subsea production system from 14 production wells and will be connected to and export oil and gas through nearby existing pipeline infrastructure.

Starlee Sykes, BP senior vice president, Gulf of Mexico and Canada, commented: “Safely starting up the Argos platform is an incredible milestone for BP and a proud moment for our team who delivered the project with an impeccable safety record. Producing some of BP’s highest value, lowest operational emissions barrels, our Gulf of Mexico business has an important role to play in delivering the energy the world needs. I am grateful to everyone who worked on Argos over the years – from discovery to start-up.” 

Based on BP’s statement, Argos is its “most digitally advanced” platform operating in the Gulf of Mexico, featuring its proprietary LoSal Enhanced Oil Recovery (EOR) and Dynamic Digital Twin technologies. This platform has a waterflood injection capacity of more than 140,000 barrels of low-salinity water per day to help increase oil recovery from the Mad Dog field. This is one of nine high-margin major projects that the oil major plans to start up by the end of 2025 globally.

David Lawler, chairman and president of BP America, stated: “Argos demonstrates BP’s continued commitment to investing in the U.S. We’re one of the largest energy producers in the country and are adding more resilient hydrocarbons at a critical moment.” 

Furthermore, the Argos platform has a Dynamic Digital Twin, a BP patent-pending software that links complex data from Argos to 3D digital models of those systems, allowing remote operators wearing Virtual Reality headsets to access data in real-time to improve decision-making, efficiency and safety. The name Argos, chosen by the project team and an employee survey, is a reference to Odysseus’ loyal dog from Homer’s ‘The Odyssey’ and a nod to the Mad Dog spar located six miles northeast. 

Operating in 4,500 feet of water about 190 miles south of New Orleans, Argos will support 250 permanent jobs. Standing 27 stories tall, the platform has a deck the length and width of an American football field and weighs more than 60,000 tons. BP is the operator with a 60.5 per cent working interest while its co-owners include Woodside Energy (23.9 per cent) and Union Oil Company of California, an affiliate of Chevron U.S.A. Inc. (15.6 per cent).  

Ewan Drummond, senior vice president of projects, production and operations, highlighted: “Projects like Argos don’t just happen. They take years of careful planning, execution excellence, and brilliant teamwork. Argos is key to our strategy of increasing our Gulf of Mexico production to around 400,000 barrels of oil equivalent per day by the middle of this decade.”

BP operates five production platforms in the deepwater Gulf of Mexico – Argos, Atlantis, Mad Dog, Na Kika and Thunder Horse –  and holds interests in four non-operated hubs: Great White, Mars, Olympus and Ursa. The oil major anticipates its production in the U.S. Gulf of Mexico to grow to about 400,000 boed net by the mid-2020s, and average 350,000 boed across the decade.

In a separate statement, BP’s partner, Australia’s Woodside, confirmed the start-up of production from the Mad Dog Phase 2 project, using the Argos platform. The company’s CEO underlines that the production start-up from Mad Dog Phase 2 demonstrates the ongoing value being delivered by Woodside’s merger with BHP’s petroleum business in 2022.

Meg O’Neill, Woodside’s CEO, emphasised: “Mad Dog is one of several low-cost producing assets for Woodside in the region with significant expansion potential and in close proximity to infrastructure and attractive markets. This makes the Gulf of Mexico a core component of Woodside’s global portfolio and a key part of our strategy to thrive through the energy transition.”