The bulk of that will be spent drilling wells and developing fields that have already been discovered, BP Chief Executive Officer Lord Browne of Madingley, said in remarks made to a Houston conference last week.

He said BP continues to be excited over its deepwater portfolio, as it brings its vast holdings in the region into development

"The deep water is a central element of our growth strategy in the medium and long term," Lord Browne said. "BP is the largest single producer of oil and gas in the United States, and the deep water will sustain that position as well as making a crucial contribution to America's energy needs."

BP is one of the largest operators in the deepwater Gulf, with more than 335,000 barrels of oil equivalent per day of production from its deepwater holdings, and reserves estimated at 3.5 billion barrels.

The company has achieved unprecedented success in its deepwater Gulf exploration program. BP has an equity stake in nine of the 10 largest fields discovered to date in the Gulf. Lord Browne said the development of seven key new projects over the next several years would occupy a significant part of the business agenda.

BP has six major fields under development in the deepwater Gulf: Thunder Horse, Atlantis, Holstein, Horn Mountain, Mad Dog and Na Kika, and holds fifty percent or greater interest in each of them. BP also operates all of the fields except Na Kika, which will also be BP operated from the onset of production. The company also has under development the Mardi Gras Transportation System to transport oil and gas from the deepwater to market.

BP is the largest acreage holder in the deepwater Gulf with more than 650 gross blocks in water depths greater than 1,500 feet. The company has approximately one-third of all deepwater Gulf reserves discovered to date.