HOUSTON (Dow Jones Newswires), Apr. 15, 2009
Emerging from years of technical problems, BP PLC's Thunder Horse platform has significantly ramped up its oil and gas output -- making the company the largest producer in the U.S. Gulf of Mexico.
A document on BP America's Web site said that the deepwater platform was producing about 300,000 barrels of oil equivalent a day in March - up from the 200,000 barrels of oil equivalent a day the company reported in February.
"It's a huge boost," said John Parry, an analyst with IHS Herold.
Parry added that the surge in production could help BP stem the decline in oil and gas output that dogs many major oil companies, in an area where taxes are lower than in other big production basins such as the North Sea or West Africa.
The ramp-up makes BP the largest producer in the U.S. Gulf, with 400,000 barrels of oil equivalent in net production a day, said spokesman Ronnie Chappell.
BP owns 75% of Thunder Horse and Exxon Mobil Corp. the remaining 25%.
Thunder Horse's success comes as BP tries to turn the page on a series of incidents that has marred the company's U.S. operations in recent years, ranging from a lethal blast at its Texas City, Texas, refinery to oil spills in Alaska. The state of Alaska and the Department of Justice filed two separate civil lawsuits against the company last month over the Alaska spills, but BP has settled most of the claims related to its U.S. troubles.
The history of Thunder Horse underscores the London-based company's lofty ambitions -- and recent bad luck. Located in deep waters 150 miles southeast of New Orleans, Thunder Horse is the largest semi-submersible oil platform ever built, with its topside area being the size of three football fields, according to the company. The platform lies one mile above the sea floor, where pressure on the drilling equipment is huge.
The Thunder Horse reservoir was discovered in 1999, and the platform was originally scheduled to become operational in 2005. But the passage of Hurricane Dennis in 2005 left the platform listing, and in 2006, the company found cracks in one of the platform's underwater structures, causing further delay. Thunder Horse began producing in June 2008.
If Thunder Horse had begun producing sooner -- when energy prices were high -- the company might have made more money.
"Obviously it's going to be a big help -- but hardly the help it might have been at $150 [per barrel] oil," said IHS Herold's Parry.
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