BP Gains Momentum on Gulf of Mexico Expansion

BP has announced the first oil from its Atlantis Drill Center 1 expansion project in the U.S. Gulf of Mexico. This milestone, coupled with ongoing expansion efforts, signals a robust commitment to growing its upstream business.

In late London trading, BP shares are trading slightly higher on the day (+0.1%),  as markets digest the implications of the Atlantis project. The project, completed ahead of schedule, is projected to add 15,000 barrels of oil equivalent per day (boe/d) to the existing Atlantis platform, which already boasts a gross production capacity of up to 200,000 barrels of oil per day. 

The Atlantis Drill Center 1 expansion involved a two-well subsea tieback to the current Atlantis platform. BP attributed the early completion to leveraging existing subsea infrastructure, enhancing drilling and completion efficiency, and streamlining offshore execution. This achievement is particularly significant as it marks the culmination of seven major project start-ups for BP this year, reinforcing the company’s operational prowess.

Beyond Atlantis, BP has also made strides with the Argos Southwest Extension project, which commenced production in August. This project adds approximately 20,000 boe/d of gross peak annualized average production through a three-well subsea tieback to the Argos platform. The Argos platform itself has a gross production capacity of up to 140,000 barrels of oil per day, further solidifying BP's presence in the Gulf of Mexico.

Looking ahead, BP has outlined ambitious expansion plans, including the Atlantis Major Facility Expansion scheduled for 2027, which aims to further increase production from the Atlantis field using existing infrastructure. Additionally, the Kaskida project, slated to start up in 2029, represents a significant investment in BP's sixth platform in the Gulf of Mexico, with an expected production capacity of 80,000 barrels per day.

Analysts are closely monitoring BP's progress toward its goal of increasing U.S. production to around 1 million boe/d by 2030. The successful execution of these projects is crucial for achieving this target and strengthening BP's position in the global energy market. However, the company remains exposed to market risks associated with fluctuating oil prices, necessitating careful management of these potential headwinds.