BP Signs Deepwater Develoment Deals

BP Amoco announced selection of contractors to provide some $1 billion in fabrication and installation services for its portfolio of deepwater Gulf of Mexico projects currently in pre-development. These projects include Crazy Horse, Mad Dog, Holstein and Atlantis.

The two companies selected are J. Ray McDermott, S.A., for fabrication of topside facilities, and Heerema Marine Contractors for the installation of facilities and associated pipelines and gathering lines. The agreement with McDermott is expected to bring as much as $600 million in work to the company's Amelia fabrication yard at Morgan City, Louisiana.

The installation agreement calls for the use of two Heerema Marine vessels, the Deepwater Construction Vessel (DCV) Balder, and the DCV Thialf, both of which will undergo extensive upgrades in preparation for the facilities and pipelines installation. The installation agreement could reach $400 million.

"We have quite a bit of work to bring several giant fields into production within approximately the same timeframe," said Dave Blackwood, BP Vice President, Gulf of Mexico Deepwater Development. "This gives us the opportunity to reduce cost and uncertainty through an innovative approach to developing the fields by standardizing facility components and fabricating those components in parallel, where appropriate. We are fortunate to have these experienced contractors join with us to assure our commitments to safety and environmental performance are met," Blackwood said.

These contracts are the first for construction work on BP's current deepwater discoveries. These are preliminary agreements, with much of the project detail yet to be delineated. BP plans to commence installation of these facilities in 2002-2003.