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April 2007

Vol. 12, No. 13 Week of April 01, 2007

BP’s woes continue with Mad Dog shutdown

Ray Tyson

For Petroleum News

BP’s upstream problems continue to mount in the deepwater Gulf of Mexico. First it was repeated production startup delays at Thunder Horse, the largest-ever oil discovery in the U.S. Gulf, followed by repeated startup delays at Atlantis, another large discovery awaiting first oil.

Now it’s Mad Dog, a 50,000-barrel-a-day producing field in Green Canyon that was forced to suspend operations Feb. 28 due to a yet undisclosed cause. Moreover, field operator BP has no estimate for when production might resume.

“We are working toward a safe restart,” BP spokesman Neil Chapman told Petroleum News March 28. “We are not predicting a date at this moment.”

Mad Dog was operating normally when a safety alarm sounded and triggered an automatic platform shutdown and compressor “blowdown” as designed, he said.

“All personnel reported to the muster stations as planned,” Chapman added. “Everyone was accounted for. There were no injuries and no environmental impact.”

A platform team responded to the “alarmed areas to verify conditions had stabilized,” he said, adding that an investigation team was then formed to determine the cause of the event.

“In light of the investigation we have made some modifications to the flare and separator systems,” Chapman said.

BP: cause of shutdown has not been determined

Early press reports said the Mad Dog shutdown was caused by a mechanical malfunction in the facility’s cooling system. However, BP told Petroleum News that the cause had not been determined.

Tony Hayward, who will replace BP Chief Executive John Browne this summer, said prior to this year’s Mad Dog shutdown that coupled with operational delays in Alaska and the North Sea, the exploration and production side of BP’s business in 2006 already was a “disappointment.”

BP said that first oil from two of its other self-described “world class” fields in the U.S. Gulf — Thunder Horse and Atlantis — would be delayed to the tune of 150,000 barrels per day in 2007 and roughly 100,000 bpd in 2008, with some additional minor deferrals by 2009.

Last year BP delayed production startup for a second time at Thunder Horse, located in Mississippi Canyon, to mid-2008 from early 2007, due to “metallurgical failure” in components of the field’s subsea system, in particular a leaky manifold evidently caused by a bad weld.

BP decided to retrieve and rebuild all of Thunder Horse’s sea-bed production equipment. First oil from Thunder Horse was initially expected in the second half of 2005, but was postponed because of hurricane damage.

And for a second time BP postponed startup of its Atlantis field, located in Green Canyon, from the first half of 2007 to late in the year. Because of a similarity in manifold design, and the fact Atlantis was in an earlier stage of development than Thunder Horse, BP decided to retrieve and make precautionary modifications to Atlantis’ manifolds.

In addition to Thunder Horse, Atlantis and Mad Dog, the Holstein field, also located in Green Canyon, represents BP’s fourth world-class project in the deepwater Gulf. Holstein commenced production in December 2004 and, thus far, appears to be running smoothly.

Mad Dog one of four gigantic discoveries

Located beneath 4,500 feet of water some 190 miles south of New Orleans, La., Mad Dog was actually the second of the four gigantic fields discovered by BP in late 1990s. It’s one of the top 10 largest discoveries to date in the Gulf of Mexico. It also represents a number of firsts in the deepwater Gulf for BP.

Mad Dog has the first polyester rope mooring system approved by the U.S. Coast Guard for use on a permanent installation. The world’s largest single-piece truss spar was fabricated for the platform. At 8,000-tons, the topsides deck was the largest single-hook load lift in the Gulf of Mexico.

Mad Dog began producing in 2005, and the platform has the capacity to produce up to 100,000 barrels of oil and 60 million cubic feet of natural gas per day. As many as 150 drilling and production personnel operate the truss spar, which is designed to produce and drill at least 12 wells simultaneously.

BP said drilling from Mad Dog was unlikely to end soon despite the fact that the reservoir is located beneath a 6,000-foot-deep salt body and contains highly mobile tar deposits “that make finding oil and gas almost as challenging as it is producing them.”

Mad Dog also will draw more production over time from other reservoirs in the field, BP said, explaining that with the field’s production capacity, BP can install additional topside equipment and handle more risers from subsea wells.

Mad Dog’s synthetic lines also give the spar more than 1,000 tons of reserve buoyancy needed to support future production growth. The platform can support waterflood equipment that can enhance future hydrocarbon recovery from the field, BP said.

Oil from Mad Dog is transported to market via a 24-inch lateral connected to the Caesar oil pipeline. Natural gas is transported via a 16-inch lateral connected to the Cleopatra gas pipeline. Both pipelines are part of the BP-operated Mardi Gras Transportation System.






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