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BHP Billiton: Funds Approved for Mad Dog Phase 2 (USA)

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BHP Billiton today announced approval for US$708 million (BHP Billiton share) in precommitment funding for the Mad Dog Phase 2 project in the deepwater Gulf of Mexico. The funding will facilitate detailed engineering and the procurement of long lead time items related to the hull, topsides and subsea equipment.

The Mad Dog Phase 2 project is based on successful appraisal drilling which confirmed significant hydrocarbons in the southern portion of the Mad Dog field. The proposed project includes the development of a second spar facility with all subsea production and injection wells. The new facility is estimated to have a design capacity of approximately 130,000 barrels of oil per day that will be exported via the Mardi Gras Pipelines under existing agreements. A final investment decision is anticipated in calendar year 2013 with first production scheduled for calendar year 2018.

BHP Billiton Petroleum Chief Executive Officer, J. Michael Yeager, said: “Mad Dog Phase 2 will join our extensive Gulf of Mexico portfolio that includes Mad Dog and Atlantis as well as the Shenzi and Neptune platforms that we operate. The extension of this field will underpin continued valuable liquids production from the Gulf of Mexico and further enhance our growth profile.”

Mad Dog is a partnership between BP (operator, 60.5 percent share), BHP Billiton (23.9 percent) and Chevron (15.6 percent).

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Scientists Conduct Expedition of Atlantis Massif in North Atlantic Ocean

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Scientists recently concluded an expedition aboard the research vessel JOIDES Resolution to learn more about Atlantis Massif, an undersea mountain, or seamount, that formed in a very different way than the majority of the seafloor in the oceans.

Unlike volcanic seamounts, which are made of the basalt that’s typical of most of the seafloor, Atlantis Massif includes rock types that are usually only found much deeper in the ocean crust, such as gabbro and peridotite.

The expedition, known as Integrated Ocean Drilling Program (IODP) Expedition 340T, marks the first time the geophysical properties of gabbroic rocks have successfully been measured directly in place, rather than via remote techniques such as seismic surveying.

With these measurements in hand, scientists can now infer how these hard-to-reach rocks will “look” on future seismic surveys, making it easier to map out geophysical structures beneath the seafloor.

“This is exciting because it means that we may be able to use seismic survey data to infer the pattern of seawater circulation within the deeper crust,” says Donna Blackman of the Scripps Institution of Oceanography in La Jolla, Calif., co-chief scientist for Expedition 340T.

“This would be a key step for quantifying rates and volumes of chemical, possibly biological, exchange between the oceans and the crust.”

Atlantis Massif sits on the flank of an oceanic spreading center that runs down the middle of the Atlantic Ocean.

As the tectonic plates separate, new crust is formed at the spreading center and a combination of stretching, faulting and the intrusion of magma from below shape the new seafloor.

Periods of reduced magma supplied from the underlying mantle result in the development of long-lived, large faults. Deep portions of the crust shift upward along these faults and may be exposed at the seafloor.

This process results in the formation of an oceanic core complex, or OCC, and is similar to the processes that formed the Basin and Range province of the Southwest United States.

“Recent discoveries from scientific ocean drilling have underlined that the process of creating new oceanic crust at seafloor spreading centers is complex,” says Jamie Allan, IODP program director at the U.S. National Science Foundation (NSF), which co-funds the program.

“This work significantly adds to our ability to infer ocean crust structure and composition, including predicting how ocean crust has ‘aged’ in an area,” says Allan, “thereby giving us new tools for understanding ocean crust creation from Earth’s mantle.”

Atlantis Massif is a classic example of an oceanic core complex.

Because it’s relatively young–formed within the last million years–it’s an ideal place, scientists say, to study how the interplay between faulting, magmatism and seawater circulation influences the evolution of an OCC within the crust.

“Vast ocean basins cover most of the Earth, yet their crust is formed in a narrow zone,” says Blackman. “We’re studying that source zone to understand how rifting and magmatism work together to form a new plate.”

The JOIDES Resolution first visited Atlantis Massif about seven years ago; the science team on that expedition measured properties in gabbro.

But they focused on a shallower section, where pervasive seawater circulation had weathered the rock and changed its physical properties.

For the current expedition, the team did not drill new holes.

Rather, they lowered instruments into a deep existing hole drilled on a previous expedition, and made measurements from inside the hole.

The new measurements, at depths between 800 and 1,400 meters (about 2,600-4,600 feet) below the seafloor, include only a few narrow zones that had been altered by seawater circulation and/or by fault slip deformation.

The rest of the measurements focused on gabbroic rocks that have remained unaltered thus far.

The properties measured in the narrow zones of altered rock differ from the background properties measured in the unaltered gabbroic rocks.

The team found small differences in temperature next to two sub-seafloor faults, which suggests a slow percolation of seawater within those zones.

There were also significant differences in the speed at which seismic waves travel through the altered vs. unaltered zones.

“The expedition was a great opportunity to ground-truth our recent seismic analysis,” says Alistair Harding, also from the Scripps Institution of Oceanography and a co-chief scientist for Expedition 340T.

“It also provides vital baseline data for further seismic work aimed at understanding the formation and alteration of the massif.”

The Integrated Ocean Drilling Program (IODP) is an international research program dedicated to advancing scientific understanding of the Earth through drilling, coring and monitoring the subseafloor.

The JOIDES Resolution is a scientific research vessel managed by the U.S. Implementing Organization of IODP (USIO). Texas A&M University, Lamont-Doherty Earth Observatory of Columbia University and the Consortium for Ocean Leadership comprise the USIO.

Two lead agencies support the IODP: the U.S. National Science Foundation and Japan’s Ministry of Education, Culture, Sports, Science and Technology.

Additional program support comes from the European Consortium for Ocean Research Drilling, the Australia-New Zealand IODP Consortium, India’s Ministry of Earth Sciences, the People’s Republic of China’s Ministry of Science and Technology, and the Korea Institute of Geoscience and Mineral Resources.

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USA: EMAS Wins Gulf of Mexico Subsea Contract from BP

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EMAS, a leading global offshore contractor and provider of integrated offshore solutions to the oil and gas (O&G) industry and operating brand for Ezra Holdings Limited (Ezra or the Group), today announces that its subsea construction division, EMAS AMC, has been awarded a contract by BP Exploration & Production, Inc. (“BP”). EMAS AMC will perform subsea work in the Atlantis field located in Green Canyon block 743 in the Gulf of Mexico.

The project scope consists of the installation and replacement of subsea equipment comprised of manifolds, PLEMs (Pipeline End Manifolds), jumpers and associated hardware in 6,800 feet of water, as well as assisting BP with complete commissioning and start-up activities.

EMAS AMC’s CEO, Mr. C J D’Cort, said: “This project award is in recognition of our expertise in the deep water subsea installation market.”

This is the second contract awarded by BP to EMAS AMC for work on the Atlantis field. The first project was completed in 2010 along with the installation of subsea hardware for BP’s Thunder Horse project. EMAS AMC’s regional headquarters in Houston will execute the planning and installation activities for the BP project during the first half of 2012.

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USA: BP Confirms Significant Resource Extension for Mad Dog Complex

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BP announced today the drilling of a successful appraisal well in a previously untested northern segment of the Mad Dog field in the US Gulf of Mexico. The well results confirm a significant resource extension for the Mad Dog Field complex, which includes the existing field, in production since 2005, and appraisal drilling of the Mad Dog South field in 2008 and 2009.

Pending confirmation through future appraisal drilling, the total hydrocarbons initially in place in the Mad Dog field complex are now estimated to be up to four billion barrels of oil equivalent.

The well, drilled by BHP Billiton on behalf of the unit operator BP, is located on Gulf of Mexico Green Canyon block 738 approximately 140 miles (225 kilometres) south of Grand Isle, LA., in about 4,500 feet (1,371 metres) of water. The well encountered about 166 net feet (50 metres) of hydrocarbons in the objective Miocene hydrocarbon-bearing sands and discovered an oil column of more than 300 feet (91 metres).

“With these additional hydrocarbon resources north of the main field, Mad Dog has been firmly established as a giant field in BP’s Gulf of Mexico portfolio, rivalling Thunder Horse in size of resource,” said Bob Dudley, BP group chief executive. “Working with the industry and regulators, we will apply our enhanced standards of safety, reliability and compliance to all of our Gulf activities as we continue to provide important jobs and energy to the nation.”

BP maintains a 60.5 per cent working interest in Mad Dog. BHP Billiton has a 23.9 per cent interest, Chevron Corporation, through its subsidiary Union Oil Company of California, has a 15.6 per cent interest.

Due to the materiality of the Mad Dog South finds in 2009, BP has been advancing development options to increase production from Mad Dog by adding another spar production facility with a production capacity of 120,000–140,000 barrels of oil equivalent per day (boed).

“Coupled with the recent exploration success at the discovery at the Moccasin prospect, located in Keathley Canyon, the Mad Dog result re-emphasizes the exploration and development potential of the Gulf of Mexico and the region’s ability to continue to deliver material projects for BP,” Dudley added.

On Sept. 6, 2011 Chevron Corporation announced the Moccasin discovery in the Lower Tertiary play on Keathley Canyon block 736. BP has a 43.75 per cent working interest in the Moccasin prospect. The prospect is operated by Chevron U.S.A. Inc., also with a 43.75 per cent interest, and the co-owner is Samson Offshore Company with 12.5 per cent interest.

The Mad Dog Field started production in 2005 and utilizes a truss spar platform, equipped with facilities for simultaneous production and drilling operations. The facility is designed to process 80,000 barrels/day of oil and 60,000 standard cubic feet/day of gas.

Oil and gas is transported to existing shelf and onshore interconnections via the Mardi Gras Transportation System.

BP is one of the largest producers of oil and gas in the US Gulf of Mexico with net production of over 250,000 boed. BP is progressing eleven Gulf of Mexico projects: Atlantis Phases 2 and 3, Kaskida, Mars B, Galapagos, Na Kika Phases 3 and 4, Freedom, Mad Dog Phase 2, Mad Dog North and Tiber.

Major BP developments in the deepwater Gulf of Mexico include: Pompano, 1994; Marlin, 2000; Horn Mountain, 2002; Na Kika, 2003; Holstein, 2004; Mad Dog, 2005, Atlantis, 2007, Thunder Horse 2008.

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