News of the setback, caused by problems with the project’s subsea infrastructure, sent oil prices jumping, ending the slump of recent weeks.

In New York, crude oil for October delivery rose US47c to $63.80 a barrel.

The Gulf of Mexico accounts for about 25% of America’s oil production.

BP had planned to restart the $US1 billion ($A1.33 billion) Thunder Horse platform, damaged by hurricanes in 2005, early next year.

But tests over four months “revealed metallurgical failure in components of the sub-sea system”, which will now be retrieved and rebuilt, the London-based company said in a statement.

A BP spokesman reportedly told Reuters that the group suspects the field had problems resulting from the oil reservoir’s high pressure and high temperature.

The setback is the latest in a string of problems for the oil giant’s operations in the United States, including an explosion at its Texas City refinery in 2005 and the shutdown of its Prudhoe Bay field in Alaska after leaks from a corroded pipe.

The latest delay is expected to have a “short-term” impact on production, but BP expects to maintain an average 4% output growth per year through 2010, spokesman David Nicholas told Bloomberg.

But the company said it is too early to estimate cost overruns. Reuters reported one BP employee as saying the group may have to find an additional $500,000.

The platform is expected to eventually produce about 250,000 barrels of oil and 20 million cubic feet of natural gas a day.

BP discovered the Thunder Horse field in July 1999 and set January 2005 as a production target, with about 50 wells.

The 50,000-ton Thunder Horse platform, the largest of its type, is 150 miles (240 km) southeast of New Orleans in water 1844m deep. BP owns a 75% stake in it, with ExxonMobil owning the remainder.