BP Begins Holstein Production in Deepwater Gulf of Mexico

BP announced start-up of oil and natural gas production from the Holstein development, located in the deepwater Gulf of Mexico, approximately 100 miles South of Grand Isle, La. BP is the Operator of Holstein with a 50% working interest. Shell also has a 50% working interest.

Located in approximately 4,300 feet of water in Green Canyon Block 645, the Holstein spar is the largest of its kind in the world. Production began on Dec. 9 and will increase over the next year as additional wells are completed and brought online. At peak production, the facility will produce more than 100,000 barrels of oil and 90 million standard cubic feet of gas per day.

"It is exciting to see Holstein commencing production on schedule. Congratulations to all those involved in the project," said David Eyton, vice president of BP's Gulf of Mexico Deepwater Business Unit. "Holstein start-up marks a period of rapid technological advance in the deepwater, for BP and for the industry. Technology developed here is already benefiting later projects, both in the Gulf of Mexico and elsewhere in the world."

"The Holstein development project is an important component of Shell's effort to develop existing oil and natural gas resources and we are proud of the Shell team that worked closely with BP to deliver this important Gulf of Mexico deepwater project," said Raoul Restucci, CEO of Shell EP Americas.

The Holstein development consists of a truss spar, equipped with facilities for simultaneous production and drilling operations. Oil from Holstein will be transported via the Mardi Gras Transportation System to Ship Shoal 332B, where it will interconnect with the Cameron Highway Oil Pipeline System (CHOPS). Holstein gas will be exported to Ship Shoal 332A, where it will interconnect with Manta Ray Gathering System, and from there to the Nautilus Gas Transportation System into Louisiana.

Holstein was discovered by BP in 1999, using the Ocean America mobile offshore drilling unit. Construction of the spar components and topsides commenced during 2001 in Pori, Finland and Morgan City, La., respectively.

Holstein is one of several BP deepwater developments scheduled for start-up in the Gulf over the next two years. The others are Mad Dog, Thunder Horse and Atlantis.

BP is the largest producer of oil and natural gas in the United States. Current BP production in the deepwater Gulf of Mexico is in excess of 300,000 (net) barrels of oil equivalent per day (boe/d), with daily production expected to increase to more than 500,000 boe/d by 2007.