British oil major BP said on Monday it will move ahead with a $5 billion offshore drilling project in the U.S. Gulf of Mexico called Tiber-Guadalupe, marking another step in the company’s strategy shift to refocus on its core oil and gas business.
The project, expected to begin oil and gas production in 2030, will include a new floating platform with the capacity to produce 80,000 barrels of crude per day.
After underperforming rivals like Shell and Exxon Mobil in recent years with rising debt, BP announced in February it would slash investment in renewable energy and grow oil and gas production to turn around its business and win back investors.
The U.S. is key to that goal, with BP aiming to reach at least 400,000 barrels of oil equivalent per day from the Gulf by 2030, up from 341,000 boepd last year.
The new platform will develop the Tiber and Guadalupe fields, located about 300 miles (480 km) southwest of New Orleans, which are estimated to hold about 350 million barrels of oil equivalent in recoverable resources, BP said. Tiber-Guadalupe will be BP’s second project in the Gulf to produce from ultra-high pressures of 20,000 pounds per square inch, a breakthrough technological advancement.
U.S. oil producer Chevron was the first to drill at that pressure from its Anchor project last year.
Development costs for Tiber-Guadalupe are expected to be about $3 per barrel lower than BP’s nearby Kaskida project after using 85% of the same design, BP said.
(Reporting by Sheila Dang in Houston; Editing by Nathan Crooks and Marguerita Choy)