BP’s sixth US Gulf of Mexico deepwater oil hub development is a go

UK-based energy heavyweight BP has taken a final investment decision (FID) to develop its sixth-operated project in a prolific high-margin basin within the U.S. Gulf of Mexico, unlocking the potential to bring online 10 billion barrels of discovered resources in place.

The FID for the Kaskida project, which will be BP’s sixth hub in the Gulf of Mexico featuring a new floating production unit (FPU) with the capacity to produce 80,000 barrels of crude oil per day from six wells in the first phase, comes weeks after Singapore’s Seatrium was hired to handle early engineering works for this newbuild FPU.

According to the oil major, the Kaskida hub is envisioned to leverage “simplified, standardized, and cost-efficient design,” which will be replicated in future projects, demonstrating the firm’s long-term commitment to delivering “secure, affordable, and reliable energy.” The production is slated to start in 2029.

Gordon Birrell, BP’s Executive Vice President of Production and Operations, commented: “Developing Kaskida will unlock the potential of the Paleogene in the Gulf of Mexico for BP, building on our decades of experience in the region.

“Technology has and will continue to play a pivotal role in propelling Kaskida from discovery to production. Together with the other resources we have in the Paleogene, we expect it to prove to be a world-class development. Today is a critical step in realizing its potential.”

With discovered recoverable resources currently estimated at around 275 million barrels of oil equivalent from the initial phase, the 100% BP-owned Kaskida project is said to unleash the potential future development of 10 billion barrels of discovered resources in place across the Kaskida and Tiber catchment areas.

The UK-based energy giant plans to leverage the existing platform and subsea equipment designs that can be replicated in future projects to drive cost efficiencies across Kaskida’s construction, commissioning, and operations phases. While additional wells could be drilled in future phases, subject to further evaluation, the project is fully accommodated within the firm’s disciplined financial framework, reflecting its drive to focus on value and returns.

Located in the Keathley Canyon area about 250 miles southwest off the coast of New Orleans, Kaskida is said to be in a prime location, with a stable fiscal regime and market access. This will also be BP’s first development in the Gulf of Mexico to produce from reservoirs requiring well equipment with a pressure rating of up to 20,000 pounds per square inch (20K).

The company underlines that advancements in 20K drilling technology coupled with updated seismic imaging enable it to safely develop the project and progress plans for other fields such as Tiber, which is anticipated to move to a final investment decision stage next year.

Since the discovery of the Kaskida field in 2006 the firm has worked closely with the offshore industry to help develop 20K rig technology necessary to complete high-pressure wells. BP produced around 300,000 barrels of oil equivalent per day from the Gulf of Mexico portfolio in 2023, which includes hydrocarbons from five operated platforms, encompassing Argos, Atlantis, Mad Dog, Na Kika, and Thunder Horse.

Andy Krieger, BP’s Senior Vice President, Gulf of Mexico and Canada, highlighted: “By employing an industry-led design solution, Kaskida will be simpler to construct and simpler to operate, enhancing safety and delivering greater value for BP.”

BP is also making inroads in developing other projects in its global oil and gas portfolio, as illustrated by the recent arrival of a floating, production, storage, and offloading (FPSO) vessel, deemed to be a key piece of the largest project in its portfolio, which came from China to its final destination off the coasts of Mauritania and Senegal, where first gas is scheduled for next quarter.