The Bakken Just Keeps Looking Better Every Day

Just the other day it was noted that the cost for Bakken wells, at least for Hess, is dropping significantly, and quickly.

Not so for the off-shore folks. Wouldn't this just ruin your day if you were the CEO of BP and were told this wonderful news? The Angola  project came in at $4 billion over budget.

A massive BP PLC oil development off the coast of Angola has come in $4 billion over budget after being delayed by a year, The Daily Telegraph reported Monday, citing an executive. 

The project, more than 100 miles offshore, was originally slated to start producing oil in late 2011 and to cost about $10 billion, the newspaper said. Instead, it began production in December, 2012 (over a year late). 

While analysts thought the project would cost nearer $12 billion, the total is now expected to be "up over $14 billion" once all the wells have been drilled and connected, Gerry McGurk, BP Angola's vice president, disclosed, according to the newspaper. 

Actually, the reality is a bit worse than the headline. The headline: $4 billion over budget. The reality "up over $4 billion more" than projected by the company. "Up over" leaves a lot of room for further upside adjustments.

And if it were a $1,000 billion project, the $4 billion would be a rounding error. But $4 billion is 40 percent -- repeat -- 40 percent -- of the company's anticipated cost. Meanwhile, at the first link above, the cost for a Hess well in the Bakken has dropped 36% over that same time period.