BHP Billiton today announced start-up of oil and natural gas production from the Mad Dog development, located in the deepwater Gulf of Mexico, approximately 200 miles south of New Orleans, Louisiana.

Located in approximately 4,300 feet of water in Green Canyon Block 782, Mad Dog initial production began on January 13, 2005 and rates will increase over the year as additional wells are completed and brought online.  The facility has a nameplate daily capacity of 100,000 barrels of oil (gross) and 60 million standard cubic feet of gas (gross).  

“I would like to congratulate all those involved in realising this milestone; our BHP Billiton employees, our operator and partners and our contractors and regulators, all of whom have pioneered this development in this challenging environment. This represents the first production from company assets in the Gulf of Mexico’s Atwater Foldbelt, where BHP Billiton made its initial investments in exploring deepwater prospects in the mid-1990s,” BHP Billiton  Group President Energy, Philip Aiken said.  

The Mad Dog development consists of a truss spar, equipped with facilities for simultaneous production and drilling operations. Oil from Mad Dog will be transported via the Caesar pipeline, where BHP Billiton has a 25% equity share, to the Ship Shoal 332B platform, where it will interconnect with the Cameron Highway Oil Pipeline System (CHOPS). Mad Dog gas will be exported via the Cleopatra pipeline, where BHP Billiton has a 22% equity share, to the Ship Shoal 332A platform, where it will interconnect with Manta Ray Gathering System, and from there to the Nautilus Gas Transportation System into Louisiana.

Mad Dog was discovered by the joint venture in 1998.  Construction of the spar components and topsides commenced during 2002 in Pori, Finland and Morgan City, Louisiana. The overall capital cost of the project is around US$ 1.5 billion (BHP Billiton share US$ 368 million).

“Today the company holds interests in more than 450 blocks in the Gulf of Mexico, with an active exploration and appraisal program, as well as development of the Atlantis field, which is scheduled to come onstream in 2006,” Mr Aiken said.

“It is an exciting time for us as we move forward to progress development studies at Neptune and Shenzi and appraise our discoveries at Puma, Chinook and Cascade. From a strategic perspective, the Gulf has now emerged as Petroleum’s third core business after Bass Strait /Eastern Australian gas and the Pacific Basin LNG / Western Australian oil and gas.”

BHP Billiton holds a 23.9% working interest in Mad Dog.  BP is the operator with a 60.5% working interest and Unocal owns a 15.6% working interest.