Delivering Growth:GoM Deepwater Exploration

Jim FarnsworthVice President, Gulf of Mexico Deepwater Exploration

Excellent Track Record

0

100

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800

Re

so

urc

es

Y

ea

rly

m

mb

oe

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2200

2400

2600

2800

3000

Cu

mm

ula

tiv

e m

mb

oe

Ram Powell

MarsUrsa

Kepler

Diana

Mickey

KingKing’s PeakMarlin

EuropaTroika

FourierNeptune

Ariel

CrosbyHooverAnstey

AtlantisMadDog

HolsteinCrazy Horse

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

N

HoustonHouston

0 500 1000 1500 2000 2500 3000 3500 4000

BP

SHELL

EXXON MOBIL

UNOCAL

BHP

KERR McGEE

AGIP

ENTERPRISE

TEXACO

ALL OTHERS

MMBOE

ProducingPlanned

Total: 9.6 BBOE

Estimated Net ResourcesBy Company

Source: J. S. Herold Deepwater IntelligenceDatabase and Publicly Announced Discoveries

36%

25%

13%

HoustonHouston

0 500 1000 1500 2000 2500 3000 3500 4000

BP

SHELL

EXXON MOBIL

UNOCAL

BHP

KERR McGEE

AGIP

ENTERPRISE

TEXACO

ALL OTHERS

MMBOE

ProducingPlanned

Total: 9.6 BBOE

Estimated Net ResourcesBy Company

Source: J. S. Herold Deepwater IntelligenceDatabase and Publicly Announced Discoveries

36%

25%

13%

Houston

New Orleans

0 100

Miles

BP Leases

8-17-00 Unclassified/ ogreg4548.cnv.Hou

Leading Deep Water Lease Position

Chevron

Source: Lexco Database, Minerals Management Service: WD >1000’

BP

Vastar

Exxon-Mobil Shell

Texaco

Others

Lease Holdings - June, 2000

802

Chevron

Crazy Horse

Mars

Atlantis

Mad Dog

Troika

Baha

Diana

2500

5000

7500

10000

N

GoM Deepwater Potential

Texas Louisiana

HoustonNew Orleans

600'

6000'0

1

2

3

4

Shallow Water (<2500’)Area 60 M mi2

Production 3 MMboe/dDiscovered 40 Bboe

6000'600'Deep Water (>2500’)Area 50 M mi2

Production* 800 Mboe/dDiscovered† 10 BboeURH 10-40 Bboe

*1999 Est.† includes Crazy Horse

The deepwater is still realtively immature and has the potential for 40 BBOE in large fields.

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101

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Shelf

Deepwater (WD >2500ft)

Cu

mu

lati

ve

Re

so

urc

e

(BB

OE

)

Discovery Sequence

N

Exploration Philosophy

Frontier: New Geology(ultra-deep drilling)

S

6-10,000 FT. W.D.

BASE SALT

PLEISTOCENE- PLIOCENE

MIOCENE-CRETACEOUS

BASEMENT

SALT

SALT

Original Salt Layer

Seafloor

Established Plays

(ultra-deep water)Frontier: New Geography

•BP led the exploration of new plays in deeper sections and in deeper water

N

Key Technology: Petroleum Systems Analysis

N

Source

Shale

SandSlity Sand

Salt

Condensed

Silty Shale

Lithology Key

Hydrocarbon Saturation

Low High

Key Technology: Depth Imaging

3DDepth Imaging

3DTime Imaging

N

•DuallGradient Drilling•Dual Gradient Drilling

Shallow Water Flow Zone

•Free-Standing Riser

•Pre-set Taut-Leg Mooring

•Utilization of 2nd/3rd Gen. Rigs

•Free-Standing Riser

•Pre-set Taut-Leg Mooring

•Utilization of 2nd/3rd Gen. Rigs

•Expandable Casings•Expandable Casings

Key DW Drilling Technologies

SALT+

+++

++

++

+++

+

+

+

++ +

+

+ +

++ + + +

+

+

+

++•SubsaltDrilling Optimization•Salt Drilling Optimization

N

Key Technology: Subsalt Drilling

•Eliminate Casing Strings•Technical Limit Drilling•Cost Savings of 30% over previous subsalt well

6000ft

-28000-27000-26000-25000-24000-23000-22000-21000-20000-19000-18000-17000-16000-15000-14000-13000-12000-11000-10000-9000-8000-7000-6000-5000

0 5 101520253035404550556065

Cost $MM

Dep

th

WD = -5,700'

Well Depth vs. Cost

Total Depth

Eliminate Intra-saltCasing String

Eliminate Second Casing String

Actual Cost

PlanCost

Western Geophysical

N

Gulf of Mexico Deepwater

N

Act

ual

/ P

roje

cted

BP

Net

of

Ro

yalt

y m

bo

ed

Near Term Projects

Major Developments

Managing the Base

1999 2000 2001 2002 2003 2004 2005 2006 2007

0

100

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Keeping the Facilities Full

Currently Drilling Exploration and Appraisal Wells

JOLIE

T

(11 mbd)

RamPowel l

Marl in

KingKing's Peak

Pompano

Nakika

UrsaMars

CrosbyEuropa

Neptune

Troika

M ica

Crazy Horse

Holstein

0 50 Miles

Made from 05084304.cv3

TexacoPOSEIDON

(400 mbd)

AM

BE

RJA

CK

(275

mbd

)

LoopStorage DELTA

(300 mbd)

COBIA(200 mbd)

(60

mbd

)

(150

mbd

)B

ON

ITO

(75

mbd

)

COUGAR(60 mbd)

BO

XE

R

(60

mbd

)

LOBSTER

(100 mbd)

LoopSPMs

MARS Oils P/L(400 mbd)

COGNAC(60 mbd)

(85 mbd)

RAM POW

ELL

(60 mbd)

BUD

(25 mbd)

Bison

Poseiden

Crazy HorseNorth

Crazy Horse Appraisal

Atlantis AppraisalMad Dog Appraisal

TimonProducingDevelopmentsDiscoveriesDrillingFuture Pipelines

Texaco

EIP

S (200 m

bd)

WH

ITE

CA

P

(195 mbd)

LOCAP

St.. James

Houston

BP 36%3.5 bboe

Others 64%6.1 bboe

Estimated Net Resources

Baha

N