LONDON, April 19 (Reuters) - BP said it was delaying a major oil project in the Gulf of Mexico as rising costs make current development plans difficult to justify.
“The current development plan for Mad Dog Phase 2 is not as attractive as previously modeled, due largely to market conditions and industry inflation,” the company said in a statement.
The UK major, in cooperation with co-owners Union Oil Company of California, a wholly owned subsidiary of Chevron Corp., and BHP Billiton Petroleum , is now evaluating how to develop the project.
“BP fully intends to develop the resources at Mad Dog Phase 2 and is committed to moving forward with the right plan,” it said. “It is too early to speculate when the details of the final plan will be approved by BP and its co-owners.”
The Mad Dog oilfield, which could contain up to 4 billion barrels of oil equivalent (boe), is one of BP’s flagship developments in the Gulf of Mexico.