British energy major
BP Plc
(
BP
) has commenced the initial production from the Galapagos
development in the deepwater U.S. Gulf of Mexico.
The Galapagos development is among the series of six new
high-margin upstream projects that the company intends to bring
online in 2012. The Galapagos development comprises three deepwater
fields - Isabela, Santiago and Santa Cruz. Production from the
fields is being churned out by using subsea equipment lying on the
floor of the Gulf.
The output from this new development is transferred to the
adjacent, BP-operated Na Kika host facility. A production flowline
loop has been recently added for the purpose of carrying the yield
to the platform, situated about 140 miles southeast of New Orleans,
in a water depth of 6,500 feet.
With a daily production capacity of 130,000 barrels of oil
equivalent, the Na Kika facility has been partially modified to
manage the current yield from these three fields. Complete upgrade
of the project is anticipated by June end.
BP has a total stake of about 56% in the three-block area
including the fields comprising the Galapagos project. The other
partners in these projects are
Noble Energy, Inc.
(
NBL
), Red Willow Offshore, LLC, and Houston Energy, L.P. BP has the
operatorship of the Isabela field while the Santiago and Santa Cruz
are operated by Noble Energy.
The commissioning of this project marks a significant milestone.
BP expects the financial momentum from these operational
initiatives to continue through 2013 and 2014. The Galapagos
development also boosts the potential of BP as a key offshore
production hub.
BP, which owns over 650 leases in the deepwater U.S. Gulf of
Mexico, has re-established its position in the region with this
project - the first new field development to come online since the
Macondo disaster in 2010. In fact, the company has planned an
annual investment of around $4 billion over the next decade in oil
and gas development in the Gulf of Mexico. BP's long-term strategy
remains strengthening its position in the Gulf Coast region and the
U.S.
BP holds a Zacks #3 Rank, which is equivalent to a Hold rating
for a period of one to three months. Longer term, we maintain our
Neutral recommendation on the stock.
BP PLC (BP): Free Stock Analysis Report
NOBLE ENERGY (NBL): Free Stock Analysis Report
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