The project is expected to boost production from the deepwater project by around 50,000 barrels of oil equivalent per day from the existing Thunder Horse platform, with first oil expected in 2021.
The two subsea production units will be developed some 3.2km south of the platform with two initial wells expected to be drilled in the near term.
Thunder Horse is operated by BP with a 75% working interest. ExxonMobil owns a 25% working interest.
"This latest expansion at Thunder Horse is another example of how the Gulf of Mexico is leading the way in advantaged oil growth for BP, unlocking significant value and safely growing a high-margin business," BP regional president for the Gulf of Mexico and Canada Starlee Sykes said.
"It also highlights out continued growth and momentum in a region that will remain a key part of BP's global portfolio for years to come."
The development and expansion of Thunder Horse South is the fourth expansion of the field and follows several other major expansion projects at the platform in recent years.
An earlier expansion of the South project was completed in 2017 and raised output by an additional 50,000 boe per day.
At its peak the 10-year-old Thunder Horse field is expected to produce 200,000boepd.
At the start of this year BP and its joint venture partner ExxonMobil made a 1 billion barrel oil discovery from the Thunder Horse field, which prompted the oil giants to make further investments of US$1.3 billion in field development.
The massive discovery is just one of several the company recently made in the Gulf of Mexico and is attributed to BP's use of new technology and advanced seismic and data processing, which the company said has enabled it to speed up the process of confirming oil finds.
At the time BP also announced two smaller discoveries at fields northeast of Thunder Horse near its Na Kika platform at the Manuel and Nearly Headless Nick prospects.
BP has four production platforms in the GOM: Thunder Horse, Atlantis, Mad Dog (which it shares with BHP) and Na Kika. It also has non-operated interest in four others: Mars, Olympus, Ursa and Great White.
