The green light for the second phase of BP's Mad Dog field comes three years after the company delayed plans to assemble a massive $20 billion oil-production spar in the region. The British firm redesigned the project and cut costs by more than half during a two-year oil bust that forced companies to shelve multibillion-dollar offshore projects. OPEC signaled it’s trying to bring the oil-price slump to an end on Wednesday with its first oil-production cut in eight years.

Big deep-water projects can still be economic in a low price environment in the U.S. if they are designed in a smart and cost-effective way,†said Bob Dudley, BP's chief executive, in a written statement.

BP said it could drill up to 14 wells and believes the deep-water platform would be able to pump as many as 140,000 barrels of oil a day, starting in 2021. The company estimates the Mad Dog field holds 4 billion barrels of oil.

Its partners Chevron and Australian company BHP Billiton, which together own nearly 40 percent of the Mad Dog project, are expected to make a final decision on the investment in the first quarter.