Mad Dog is operated by BP Plc, which said in December it would go ahead with Phase 2 in the Green Canyon deepwater area, building a new floating production facility with a capacity of 140,000 gross barrels of crude oil per day.
Production is due to begin in late 2021.
The expansion is one of global miner BHP's key growth projects, with the company focusing its capital spending on copper and petroleum. The company is due to report its half-yearly results on Feb. 21.
BP holds a 60.5 percent stake, with BHP owning 23.9 percent and Chevron Corp's Union Oil Company of California holding 15.6 percent.
(Reporting by Sonali Paul; Editing by Joseph Radford)