BP Plc (LON:BP) has green-lighted a new Gulf of Mexico project, 190 miles from New Orleans, in its first major investment since the Macondo disaster.
It is now more than six and a half years since the oil spill, America’s worth ever environmental disaster.
Having paid billions in fines and compensation in the wake of Macondo the FTSE 100 oiler is now prepared to invest in a new GoM project.
The plan is to invest US$9bn into the Mad Dog project, which is also part owned by BHP Billiton and Chevron, to establish production of 140,000 barrels per day from fourteen wells by 2021.
A significant reason behind BP decision to make waves again in the Gulf of Mexico is the fact that development costs have severely reduced due to sector-wide inactivity following two years of low crude oil prices. New project designs are also keeping capital costs down.
Previous estimates put the cost of Mad Dog in excess of US$20bn.
BP boss Bob Dudley said: ““This announcement shows that big deepwater projects can still be economic in a low price environment in the U.S. if they are designed in a smart and cost-effective way.”