BP's offshore Angola oil project sees cost increase

A new oil development in Angola by British Petroleum came in over budget after it was delayed for a year, according to Dow Jones Newswires. The project called PSVM came in at $4 billion over its original budget of $10 billion.

A new oil development in Angola by British Petroleum came in over budget after it was delayed for a year, according to Dow Jones Newswires. The project called PSVM came in at $4 billion over its original budget of $10 billion.

The report said the project is located more than 100 miles offshore and was supposed to begin oil production in late 2011 but instead only began production last December. The total cost of the project is going up be "up over $14 billion" after the wells are drilled and connected.

BP holds a 27 percent stake in the project while other partners make up the rest of the project's stake. Dow Jones Newswires reported the extra cost of the large offshore oil development will be divided among the partners.

"We probably underestimated the length of time it was going to take both doing the conversion in Singapore, and the extent of the installation activity in Angola," said Regional President of BP Martyn Morris.

The project will produce crude oil from four surrounding fields including Plutao, Saturno, Venus and Marte, the UK Telegraph said. PSVM can store up to 1.6 million barrels of oil.

Learn more about the Angola gas market in PennEnergy's research area.

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