The Mad Dog Phase 2 project is the second stage of development of the BP-operated Mad Dog offshore field, which started production in 2005.

The proposed Mad Dog Phase 2 development involves a new floating production platform with a production capacity of up to 140,000 gross barrels of crude oil per day from up to 14 production wells.

Production from the new development is scheduled to begin in late 2021.

BP Group CEO Bob Dudley said: "This announcement shows that big deepwater projects can still be economic in a low price environment in the US if they are designed in a smart and cost-effective way.

"It also demonstrates the resilience of our strategy which is focused on building on incumbent positions in the world’s most prolific hydrocarbon basins while relentlessly focusing on value over volume."

The Mad Dog Phase 2 project is operated by BP with 60.5% stake while other partners include BHP Billiton with 23.9%, Chevron affiliate Union Oil Company of California 15.6%.

BP Gulf of Mexico business president Richard Morrison said: "The project team showed tremendous discipline and arrived at a far better and more resilient concept that we expect to generate strong returns for years to come, even in a low oil price environment."

BP operates four large production platforms including Thunder Horse, Atlantis, Mad Dog and Na Kika in the deepwater Gulf of Mexico.

Between 2016 and 2020, BP intends to add approximately 800,000 net barrels of oil equivalent per day of production capacity from new projects.

Image: One of the BP’s production platforms in deepwater Gulf of Mexico. Photo: courtesy of BP p.l.c.