BP signs deepwater development deals

BP has awarded $1 billion in offshore service contracts to J. Ray McDermott and Heerema Marine Contractors for work on several of its deepwater Gulf of Mexico projects, including the Crazy Horse, Mad Dog, Holstein, and Atlantis developments. J. Ray McDermott will construct topside facilities and Heerema Marine Contractors will install facilities, associated pipelines, and gathering lines.


BP has awarded $1 billion in offshore service contracts to J. Ray McDermott and a unit of Heerema Marine Contractors Holding BV for work on several of its deepwater Gulf of Mexico projects, including the Crazy Horse, Mad Dog, Holstein, and Atlantis developments.

J. Ray McDermott will construct topside facilities, and Heerema Marine Contractors will install facilities, associated pipelines, and gathering lines. McDermott expects the contract will bring as much as $600 million in work to its Amelia fabrication yard at Morgan City, La.

The installation agreement calls for the use of two Heerema Marine deepwater construction vessels, Balder and Thialf, both of which will undergo upgrades in preparation for jobs. The installation agreement could reach $400 million.

BP plans to begin installation of these facilities in 2002-2003.

BP will have exclusive use of J. Ray McDermott's facility near Morgan City, La., during construction of the topsides.

Over the next several years, the work is expected to bring as much as $600 million in revenues to J. Ray McDermott and create 400-500 new jobs for fabrication workers at the facility. J. Ray McDermott will dedicate its fabrication yard in Amelia, La., solely to work on the topsides for BP's Holstein, Mad Dog, Atlantis, and Crazy Horse projects. Fabrication will begin in the second half of 2001. Three of the four projects will be spar developments.

Development options for Crazy Horse, the largest of the projects, are still being evaluated. Crazy Horse is located in 6,000 ft of water in the Boarshead basin, 125 miles southeast of New Orleans, La. With estimated recoverable oil of at least 1 billion boe, Crazy Horse is the biggest discovery ever in the deepwater Gulf.

The other three projects are located in 4,500-6,500 ft of water in the southern Green Canyon area of the Gulf, 150 miles south of New Orleans.

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