First oil from two major deepwater Gulf of Mexico projects slated for this year

Two oil projects located in the deep waters of the U.S. Gulf of Mexico, both approved before the Covid-19 pandemic and initially expected to start production in 2021, are expected to come online by the end of this year.

These two projects are BP’s Mad Dog 2 and Shell’s Vito development. Floating production platforms for both of these projects are already at their respective locations in the Gulf of Mexico where they are being prepared to start production. BP has recently cast some doubt over its Mad Dog 2 start-up following issues detected during testing. However, as it stands now, both projects are expected to come online this year.

The super-giant Mad Dog oil field, discovered in 1998, started production with its first platform in 2005. 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. Under the initial timeline, the first oil production was expected to begin in late 2021. The second platform will be 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 current 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.

The construction of the  60,000-ton Mad Dog 2 platform, named Argos, started in March 2018 at the Samsung Heavy Industries yard in South Korea following a contract award from early 2017. It 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.

A pre-production inspection by the U.S. offshore safety agency BSEE was conducted in mid-May 2021 and the platform was then towed to its final location in the Gulf of Mexico in September 2021. At that time, it was expected that the production would start in the second quarter of 2022.

In late 2021, the Mad Dog 2 project was expected to start up in 2Q 2022 but, in its 4Q 2021 report issued in February 2022, BP said it was scheduled for the second half of 2022.

Now, it seems that there have been some issues related to the project, which are being assessed. This update arrived in 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 is proceeding to plan, with a successful wells campaign nearing completion.

However, the company also said that an issue with two of the subsea production flexible joints was detected during testing. “This is being assessed and an update on whether the expected project start-up in 2022 is impacted will be provided in due course, as appropriate,” BP said.

At peak, the platform will produce up to 140,000 barrels of oil equivalent per day (boe/d) through a subsea production system from 14 production wells. It will be connected to and export oil and gas through nearby existing pipeline infrastructure. Argos will be BP’s fifth-operated platform in the Gulf of Mexico and the first new one in the Gulf since 2008 when Thunder Horse came online.

The Vito deepwater field, located over four blocks in the Mississippi Canyon area of the Gulf of Mexico, was sanctioned in April 2018, setting in motion the construction and fabrication of a new, simplified host design and subsea infrastructure. Initially, it was scheduled to begin producing oil in 2021.

The contract for the construction and integration of the hull, topsides, and living quarters of the platform was awarded to Singapore’s Sembcorp Marine in May 2018. The integration of mega-topsides with a hull for the Vito unit was completed in October 2021 and Sembcorp Marine delivered the platform to Shell in December 2021 after which the platform departed Tuas Boulevard Yard for Singapore’s anchorage to prepare for loadout and its sail away to the Gulf of Mexico.

Following its arrival in March 2022, the 40,000-ton semi-submersible platform was inspected by the BSEE at the Kiewit shipyard in Ingleside in May 2022. The on-site inspection was one of the steps required to clear the platform for sailing to its planned destination in the Gulf of Mexico.

Finally, in mid-July 2022, the Vito platform sailed away from Kiewit to its final destination about 150 miles south of New Orleans for installation at a water depth of approximately 4,000 feet. This was reported by Shell USA President, Gretchen Watkins and also confirmed by Gate Energy and its CEO, Lee Jordan.

Gate Energy was involved in commissioning planning and onshore commissioning execution and it is also supposed to be part of offshore commissioning / ready-for-startup services under a contract award from June 2018.

Jumbo Maritime was put in charge of the initial pre-lay of the mooring system as well as the subsequent tow and hook-up of the floating production unit and Fugro of positioning and metocean services, helping to guide the safe transport and installation of the platform.

Supported by Vito’s 4-column semi-submersible hull, the platform topsides weigh 9,200 tonnes and are designed to produce 100,000 bpd of oil and 100 MMSCFD of gas. The development currently has an estimated, recoverable resource of 300 million boe. It is expected to come online in the fourth quarter of 2022.