Silicon Investor - BP p.l.c.

[Jon Koplik] WSJ -- BP Suspends Share Buyback Amid Overhaul .................................

Jon Koplik — 2/10/2026 10:20:28 PM

WSJ -- BP Suspends Share Buyback Amid Overhaul ......................................................

WSJ

BP Suspends Share Buyback Amid Overhaul

Oil major moves to shore up finances as it pivots back to fossil fuels

Updated Feb. 10, 2026 8:54 am ET

By Adam Whittaker

BP suspended its share-buyback program and said it would reduce spending this year, part of a broader plan by the British energy giant to overhaul its business.

The London-based company is in the early stages of a turnaround aimed at bringing the business back to its oil-and-gas roots after an ill-timed move into renewables that left it the least profitable of the major oil companies.

BP said Tuesday that the moves to scrap its quarterly share buyback and curb capital expenditure were aimed at shoring up the company’s finances as it works to become a simpler, more profitable business.

Shares in BP were down about 4% in early afternoon trading in Europe.

BP’s decision to halt buybacks illustrates a split among big energy companies. Exxon Mobil and Shell recently said they aim to keep buying back stock at the same pace as last year, while Chevron and France’s TotalEnergies have signaled they would slow purchases as oil prices weaken.

Crude prices fell by nearly a fifth last year, before regaining ground in early 2026 amid heightened geopolitical tensions.

The last time BP didn’t launch a quarterly buyback was in 2020 during the early stages of the pandemic, when a sharp drop in prices prompted energy companies to preserve cash.

Tuesday’s announcement represents a step change in the pace of BP’s efforts to strengthen its balance sheet, Chief Financial Officer Kate Thomson said in an interview. BP’s previous buyback was $750 million a quarter after being reduced from $1.75 billion in April.

BP also said that it was lowering capital expenditure for 2026 -- to no more than $13.5 billion, compared with $14.5 billion last year. And it is increasing its cost-reduction target to $6.5 billion by the end of 2027, from $5 billion.

The adjustments came as BP reported an underlying replacement cost profit -- a similar metric to net income that U.S. oil companies report -- of $1.54 billion for the fourth quarter, roughly in line with what analysts had expected.

BP said the moves would better position the company to invest more in its fossil-fuel business. Meg O’Neill, an oil-and-gas veteran who most recently led Australia’s Woodside Energy, is set to take over as chief executive in April.

The company has already taken steps to cut spending on renewable-energy assets that hurt profits and led to multibillion-dollar write-downs, while turning to cost savings and asset sales to rein in its net debt. BP on Tuesday detailed accounting charges against its solar business, Lightsource bp, as well as U.S. biogas producer Archaea.

Pausing the buyback is the right long-term move given BP’s relatively weak balance sheet and emphasis on reducing debt ratios, RBC Capital Markets analysts said in a note to clients.

BP’s net debt stood at more than $22 billion in the fourth quarter, but this doesn’t include the roughly $6 billion of proceeds the company is set to receive from the sale of a majority stake in its Castrol lubricants business. The company has agreed to deals that are expected to bring in more than $11 billion so far, against its target of raising $20 billion from divestitures by 2027.

The company wants to cut net debt to between $14 billion and $18 billion by the end of 2027.

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[Jon Koplik] OGJ -- BP makes its largest discovery in 25+ years ................................

Jon Koplik — 8/5/2025 3:37:50 PM

OGJ -- BP makes its largest discovery in 25+ years .....................................

bp makes large deepwater pre-salt discovery offshore Brazil

bp made an oil and gas discovery -- its largest since Shah Deniz -- at the Bumerangue prospect deepwater offshore Brazil in Santos basin.

By Alex Procyk

Aug. 4, 2025

Key Highlights

bp made an oil and gas discovery at the Bumerangue prospect deepwater offshore Brazil in Santos basin.

The company expects it to be its largest discovery since Shah Deniz gas field in 1999.

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bp made an oil and gas discovery at the Bumerangue prospect deepwater offshore Brazil in Santos basin.

The company drilled exploration well 1-BP-13-SPS at Bumerangue block, 404 km from Rio de Janeiro in 2,372 m of water. The well was drilled to 5,855-m TD and intersected the reservoir about 500 m below the crest of the structure. The well penetrated an estimated 500-m gross hydrocarbon column in high-quality pre-salt carbonate reservoir with an areal extent larger than 300 sq km.

Results from the rig-site analysis indicate elevated levels of carbon dioxide, and bp will analyze the reservoir fluids to characterize the reservoir and fluids discovered to determine the potential of Bumerangue block. bp expects it to be its largest discovery since discovering Shah Deniz gas field in the Caspian Sea in 1999.

Further appraisal activities are planned, subject to regulatory approval. In addition to the Bumerangue prospect drilling campaign this year, an exploration well is planned for Tupinambá block in 2026.

bp holds 100% participation in the block with Pré-Sal Petróleo SA as the production-sharing contract manager.

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[Jon Koplik] Offshore magazine -- Shell considers bid for BP amid rival’s net zero crisis .....

Jon Koplik — 5/7/2025 10:19:03 PM

Offshore magazine -- Shell considers bid for BP amid rival’s net zero crisis .....................................

May 4, 2025

Report: Shell considers bid for BP amid rival’s net zero crisis

As reported by Bloomberg, Shell is seriously exploring how feasible and beneficial a takeover of BP would be.

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Shell is considering a takeover of BP after the oil giant’s “botched” pivot to net zero left it vulnerable, according to a Bloomberg report.

As reported by Bloomberg, Shell is seriously exploring how feasible and beneficial a takeover of BP would be. Shell is reportedly engaging with advisers to plan out what a deal would look like.

It comes amid turmoil at BP over its approach to green energy. The company vowed to slash its oil and gas production and invest heavily in renewables in 2020, making the boldest commitment to net zero in the fossil fuel industry.

However, the strategy failed to deliver financial returns and BP has recently abandoned the plans in favor of a return to focusing on oil and gas. It follows intense pressure on management from US hedge fund Elliott Management, which has become one of BP’s biggest shareholders after building a 5% stake.

The muddle at BP has left its stock price languishing. Shares have slumped 30% over the last 12 months and are just 11% above where they were when BP launched its green energy strategy.

By contrast, Shell’s stock has rallied almost 90% over the last five years as it has focused on oil and gas. The divergence has left BP worth just £55 billion, compared to Shell’s £148 billion.

A combination of Shell and BP has long been speculated but a deal would be likely to face intense political scrutiny and attract the attention of competition regulators.

Shell is understood to be biding its time and awaiting further drops in BP’s shares and oil prices before deciding whether to bid.

A Shell spokesman said: “As we have said many times before we are sharply focused on capturing the value in Shell through continuing to focus on performance, discipline and simplification.”

Wael Sawan, Shell’s chief executive, told analysts on Friday that the oil giant “of course ... will keep looking at inorganic opportunities” for growth but said the “the bar is high” for deals.

Buying back Shell’s own shares currently presents the best value for money, he argued. Sawan added: “I have said in the past that we want to be value hunters. Today, value-hunting – in my view – is buying back more Shell.”

The chief executive added that Shell needed to “have our own house in order” before doing big takeovers.

A “swoop” for BP could help Shell boost output by gaining more exposure to the United States. BP has significant operations in the US Gulf of Mexico and announced a fresh discovery there at its Far South prospect just last month.

It would also help Shell build the scale to better compete with US oil giants, whose value dwarfs Shell. Exxon Mobil, for example, is worth $459 billion (£345 billion).

The threat of a takeover will add to pressure on BP’s management, led by Murray Auchincloss, the chief executive. A fundamental “reset” of the company’s strategy, announced in February, has failed to improve its share price or satisfy Elliott.

Despite jettisoning much of its green energy plans as Elliott wanted, the hedge fund is now pushing for more changes. BP is under pressure to cut jobs across its UK operations to free up cash to return to investors. The oil major has already unveiled plans to cut 4,700 jobs and 3,000 contractors globally.

© 2025 Endeavor Business Media, LLC.

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[Jon Koplik] Bloomberg -- Activist Elliott Said to Build Stake in Struggling Oil Major BP ....

Jon Koplik — 2/8/2025 10:02:47 PM

Bloomberg -- Activist Elliott Said to Build Stake in Struggling Oil Major BP ...................

Bloomberg

February 8, 2025

Activist Elliott Said to Build Stake in Struggling Oil Major BP

Elliott seeks to boost shares through transformative measures
Activist fund sees £69 billion British oil firm as undervalued

BP Plc has fallen about 8% over the past five years.

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By Dinesh Nair, Aaron Kirchfeld, Swetha Gopinath, and Mitchell Ferman

Elliott Investment Management has built a significant stake in BP Plc, according to people familiar with the matter, as the British oil major struggles to win back investor confidence and reverse years of underperformance.

The activist fund is seeking to boost shareholder value by pushing the company to consider transformative measures, the people said, asking not to be identified because the discussions are private. Elliott believes BP is significantly undervalued and its performance is disappointing, they said. The exact size of the stake couldn’t be immediately learned.

Representatives for Elliott and BP declined to comment.

BP has fallen about 8% over the past five years, while its Big Oil rivals from Shell Plc to Exxon Mobil Corp have risen by at least 30%. The company under former Chief Executive Officer Bernard Looney embraced net-zero in a failed bet that oil consumption had peaked, and has since struggled to present a clear strategy for a turnaround.

With a market value of about £69 billion ($86 billion), BP is worth less than half of Shell today.

CEO Murray Auchincloss, an insider who stepped into the role after Looney was dismissed over his personal conduct, is widely expected to outline a clearer shift back toward oil and gas when he presents a much-anticipated strategy update on Feb. 26. However, investors have been growing impatient, including after BP warned in October that its share buybacks could slow this year.

BP is scheduled to report fourth-quarter financial results on Tuesday, and has already flagged broad weakness across its business for the period. While its biggest rivals also reported lower earnings in the last three months of the year, analysts view those companies as having a clearer direction and stronger balance sheets.

Elliott’s move is the latest in a series of high-profile activists taking on Big Oil. Exxon lost an battle to ESG-leaning Engine No. 1 in 2021, while Dan Loeb’s Third Point LLC took a stake in Shell in the same year, calling for the company to break off its liquefied natural gas, renewables and marketing divisions into a standalone business.

Elliott has in recent months successfully pushed for a breakup at Honeywell International Inc., which announced this week it would split into separate publicly traded companies. The fund also disclosed a stake in Anglo American Plc last year during BHP Group’s attempt to acquire the London-based miner.

It also has a long history of taking stakes and pushing for changes at energy companies, including campaigns at NRG Energy Inc. and Canadian oil producer Suncor Energy Inc. in recent years.

BP stock is held by a wide range of institutional investors. The company’s prolonged underperformance has prompted some commentators to suggest that its best option could be to find a buyer, pointing in particular to Shell, which could reap significant costs savings and growth in the US and create a British-Dutch champion, or other rivals such as ConocoPhillips or TotalEnergies SE.

Auchincloss announced last month the company would cut about 5% of its workforce to reduce expenses, and was planning further cost-cutting efforts over this year. The company has stopped or paused 30 projects since last June to focus on the ones that make the most money.

© 2025 Bloomberg L.P.

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[Jon Koplik] Bloomberg Opinion / BP’s Chairman Needs to Put the Company Up for Sale ...........

Jon Koplik — 12/9/2024 3:30:05 PM

Bloomberg Opinion / BP’s Chairman Needs to Put the Company Up for Sale .......................

Bloomberg
Opinion

By Javier Blas, Columnist

BP’s Chairman Needs to Put the Company Up for Sale

The UK oil company’s future as a standalone entity is bleak.

December 9, 2024

By Javier Blas

Javier Blas is a Bloomberg Opinion columnist covering energy and commodities. He is coauthor of “The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources.”

BP’s future as a standalone entity is bleak. The board should put the UK oil company up for sale.

In the spring of 1998, with oil hovering near $10 a barrel, BP Plc reached a dismal conclusion: Its future as a standalone company was grim. So John Browne, its chief executive officer at the time, rang the chairman of US rival Amoco and proposed a merger. The deal, announced in August of that year, triggered a flurry of M&A activity that created the current Big Oil mob.

Today, BP is at a similar juncture. Its future alone is bleak. Investors have lost faith in its strategy, its management and its board. Even sell-side analysts, typically deferential to the companies they cover, are out for blood: Take the headline of a recent report by veteran analyst Paul Sankey that read “BP Results: Beat? Miss? Who Cares, Fire the Board.”

History doesn’t repeat, but it rhymes.BP Chairman Helge Lund needs to pick up the phone and seek a deal -- effectively putting the company up for sale. If he plays it well, the oil major may get to call the resulting transaction a “merger of equals.” So who can he phone? Shell Plc, of course. Moreover, the UK government should encourage such a deal with the aim of keeping a Shell-BP company British and still listed in London.

BP executives may be pinning their hopes that a strategic update, scheduled for February, will revive the company’s fortunes. Lund was in the US last month sounding out institutional investors; my understanding is that they denounced the current strategy. In 2020, BP made a bet: oil demand had peaked, and the future was about reducing fossil fuel output and investing an ever-larger share of its budget in green electricity, primarily wind and solar power. Since then, the company has rowed back on its green strategy, but investors are demanding it refocus on its traditional strengths -- oil and gas.

While some are willing to give the board the benefit of the doubt for the next few months, I doubt BP can change direction to their satisfaction. My skepticism is compounded by the board’s selection of Murray Auchincloss, one of the architects of the current strategy, as its chief executive. If the board wanted a U-turn, it should have chosen a different leader in January.

The damage to BP in recent years has been enormous. At about $75 billion, BP’s market valuation is a shadow of its previous might. In 2006, the company was worth $250 billion; even in 1998, before the merger with Amoco, it was worth $80 billion. Its stock-market performance has been horrid. BP is among the top-10 worst performers on the FTSE 100 blue chip index in the past 12 months. It doesn’t look prettier if one looks further afield -- in the past five years, its shares are down 20%, compared with gains for its rivals of 10% to 70%. BP’s stock would be even lower if investors weren’t anticipating either an activist emerging or an M&A deal. But those opportunistic hedge fund bets won’t last for ever.

To be sure, the company is far from a basket case. Its Gulf of Mexico business is second to none and its trading capabilities are legendary. But it’s also carrying a lot of underperforming divisions, while its Russian business is so toxic that it’s impossible to value.

Importantly, BP is probably worth more as the sum of its parts than as a whole, offering an opportunity for any buyer to hang on to the assets it wants, and sell the rest: Private equity firms and sovereign wealth funds would be eager buyers of whatever a potential purchaser was willing to dispose of.

If the BP chairman did make the call, Shell CEO Wael Sawan should pick up the phone. The numbers would stack up even after paying a typical 30% premium. Synergies alone would generate billions of dollars of savings; when analysts at Barclays Plc did the sums on a fantasy BP-Shell merger, they came up with $7.5 billion in annual operating cost savings and a $5 billion reduction in capital expenditure, suggesting the transaction would pay for itself in a few short years.

Moreover, buying BP would resolve key problems for Shell; how to sustain growth after 2030, and how to add exposure to the US. Shell executives have made some very good decisions in recent years; abandoning the American shale sector wasn’t one of them. The main obstacle to a deal? Shell is currently focusing on a business revamp that won’t be completed until mid-2026, so a transaction with BP now would be earlier than the company would wish. The thing about M&A, though is that it happens when it’s possible, not when the time is ideal.

There are other options. BP could try to entice TotalEnergies SE into a merger of equals of sorts, but the idea of a French-British -- with emphasis on that particular order of nationalities -- oil company seems farfetched. The UK government might not be so keen on a foreign takeover. I also worry that buying BP would burden Total’s balance sheet too much, particularly if oil and gas prices remain at current levels.

In the absence of a European deal, BP might be attractive to US oil giant-in-waiting ConocoPhillips. Conoco has a market value of $135 billion, making it almost double the size of BP. It’s expanding in liquefied natural gas, and BP could turbocharge that business; it would also deliver a fantastic trading business to Conoco, along with production in the Gulf of Mexico, where the US-based company isn’t currently present. But Conoco would have to dispose of way too many other assets, starting with the downstream operations; the company has spent more than a decade focusing entirely on pumping oil and gas, rather than refining it and selling it to costumers.

There’s another US option: tapping Warren Buffett’s riches via a deal with Occidental Petroleum Corp. Adding Occidental’s shale operations to BP’s best assets could work; though, here again, the British government might object to BP relocating to America.

Finally, BP could seek a Middle Eastern strategic investor -- the state-owned oil companies of Abu Dhabi and Kuwait come to mind. In the late 1980s the Kuwaitis bought more than a fifth of BP, although later London intervened and forced the Middle Eastern nation to sell a chunk. With that history, a deal may be complicated -- but state-controlled firms are keen to expand into trading and LNG. Moreover, if new shareholders force a change of strategic direction, they’ll benefit from any resulting rally in BP shares.

Considering BP’s disastrous performance in recent years, the board should be considering all options. To my mind, putting itself up for sale would be a sensible move -- and the sooner the better.

© 2024 Bloomberg L.P

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[Jon Koplik] Reuters -- BP profit slumps to near four-year low as oil demand sags ..........

Jon Koplik — 10/30/2024 1:22:43 AM

Reuters -- BP profit slumps to near four-year low as oil demand sags ...............................

Reuters

10/29/2024

BP profit slumps to near four-year low as oil demand sags

By Ron Bousso

LONDON (Reuters) -- BP on Tuesday reported a 30% drop in third-quarter profit to $2.3 billion, the lowest in almost four years, weighed down by weaker refining margins and oil trading results.

The decline was smaller than expected amid a slowdown in global economic activity and oil demand, particularly in China, but raises pressure on CEO Murray Auchincloss, who has vowed to boost BP's performance in the face of investor concerns over its energy transition strategy.

"We've been making massive progress focusing and simplifying the business," Auchincloss told Reuters.

BP shares, which were trading 4.25% lower by 13:57 GMT, compared with a 0.5% drop for rival Shell, have under-performed those of its rivals so far this year, falling 18% compared with a 2.7% decline for Shell and a 18% gain for Exxon Mobil as investors question the company's ability to generate profits. A 9% annual rise in BP's debt levels has further worried investors.

The energy giant maintained its dividend at 8 cents a share

[ note from Jon -- these are the so-called "ordinary shares," which are each 1/6 of the BP ADR -- that we trade on the NYSE ]

after raising it in the previous quarter. It also kept the rate of its share buyback programme at $1.75 billion over the next three months and committed to do so again for the following three months. BP will update its financial framework in February.

Auchincloss, who took up the job in January, has vowed to focus on high-margin businesses, distancing himself from predecessor Bernard Looney's strategy to rapidly expand renewables and reduce oil and gas output.

Reuters reported earlier this month, citing sources, that BP had abandoned a flagship target to cut oil and gas output by 2030.

Auchincloss told Reuters on Tuesday that BP will focus on value, not volume, for its operations. "Whenever in the past round we've chased volume, we've gotten it wrong," he said.

The company has also scaled back its low-carbon hydrogen investments and plans to sell its U.S. onshore wind operations.

Sources also told Reuters that BP is considering selling a minority stake in its offshore wind business. Auchincloss said on Tuesday BP will bring in partners to offshore wind projects over time.

Auchincloss also said BP has the potential to grow oil and gas output through the end of the decade while it also continues to make high-grade investments in low-carbon and renewables.

"There still looks potential for a differentiated growth, driven out of fuels marketing, bio-gas and the core Upstream business, but it is unlikely that the market focuses on this potential until we get re-worked financial targets," Citi analysts said in a note.

WEAK REFINING

BP's underlying replacement cost profit, the company's definition of net income, reached $2.27 billion in the third quarter, exceeding forecasts of $2.05 billion in a company-provided survey of analysts but down from $2.8 billion in the previous quarter and $3.3 billion a year earlier.

The results were the weakest since the fourth quarter of 2020, when profits collapsed during the pandemic.

BP's oil and gas production rose by 3% from a year earlier to 2.38 million barrels of oil equivalent per day, helping to offset a drop in refining margins and weaker oil trading. Higher natural gas prices further boosted earnings, although gas trading was average in the quarter, BP said.

Global oil refiners are seeing profitability drop to multi-year lows in a sharp reversal for an industry that had enjoyed surging post-pandemic returns, underlining the extent of the current demand slowdown.

"Refining margins are dismal right now. The third quarter was a tough quarter, and the start of the fourth quarter is pretty bad as well," Auchincloss told Reuters.

Net debt rose to $24.3 billion from $22.6 billion at the end of June. Its debt-to-market capitalisation ratio, known as gearing, rose to 23.3% from 20.3% a year earlier.

© 2024 Reuters.

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[Jon Koplik] WSJ -- BP’s CEO Plays Down Renewables Push as Returns Lag .........................

Jon Koplik — 2/1/2023 11:51:50 AM

WSJ -- BP’s CEO Plays Down Renewables Push as Returns Lag ..............................

Feb. 1, 2023

BP’s CEO Plays Down Renewables Push as Returns Lag

Bernard Looney seeks to sharpen strategic focus, with less emphasis on environmental goals

By Jenny Strasburg

LONDON -- BP PLC Chief Executive Bernard Looney plans to dial back elements of the oil giant’s high-profile push into renewable energy, according to people familiar with recent discussions.

Mr. Looney has said he is disappointed in the returns from some of the oil giant’s renewable investments and plans to pursue a narrower green-energy strategy, the people said. He has told some people close to the company that BP needs to do more to convince shareholders of its strategy to maximize profits in areas where it has a competitive advantage, including its legacy oil-and-gas operations.

In some of the conversations, Mr. Looney has said he plans to place less emphasis on so-called ESG goals -- a catch-all term for environmental, social and governance -- to help clarify that those aren’t distracting the company from its ability to deliver profits, the people said.

Mr. Looney, the people said, is casting the moves as a modest short-term course correction rather than a major strategic pivot for the 114-year-old company.

Analysts and some investors say pledges by BP to shift away from fossil fuels and into renewable energy risk handicapping the company’s performance. Many companies are struggling to transition to new green technologies while still relying heavily on traditional energy sources.

A BP spokesman referred to previous public statements Mr. Looney and BP have made about the company’s strategy, including its commitment to reducing carbon emissions and shifting investments to green energy. Mr. Looney declined to comment through the spokesman.

BP is scheduled to report full-year earnings Feb. 7 after consecutive bumper quarters boosted by massive profit in its natural-gas trading arm. The company will update investors on its strategic progress at that time, the spokesman said.

Mr. Looney, a 32-year BP veteran, took over as CEO in early 2020 and soon announced commitments to shrink greenhouse-gas emissions, including from oil and gas the company sells. Analysts said at the time that the new targets went further than rivals’ plans. Investors questioned how renewables could make up for fossil-fuel businesses that typically produced higher -- if volatile -- returns.

Shares of BP and London-based rival Shell PLC over the past several years have lagged behind those of U.S. competitors, especially the biggest, Exxon Mobil Corp. BP shares are up about 7% from the end of January 2020, having recovered from pandemic lows, while Exxon shares have nearly doubled over the same period.

As European oil companies, BP and Shell face greater investor and government scrutiny over their carbon-reduction plans than do U.S. rivals, which have stuck more to their core oil-and-gas businesses. Still, overall, the sector globally has been caught between some large investors and governments calling for these companies to move away from fossil fuels, while others demand the profits those assets can generate.

BP shares climbed more than 1% on Wednesday morning in early trading.

Mr. Looney has said in some of the recent discussions that the company will continue its push into renewable energy, but with a finer-tuned focus to avoid spreading resources too thinly or relying too heavily on renewables in its broader strategy. He has suggested that areas of continued emphasis will include developing climate-friendly hydrogen, biogas and electric-vehicle partnerships and charging networks, the people said.

He and other BP executives have suggested that the company could play down future investment in areas including solar energy and offshore wind, according to some of the people.

Discussions about the company’s direction have caused rifts inside BP over the past year, people close to the company say.

Mr. Looney’s comments follow a challenging three years as CEO for the 52-year-old Irishman. He took over the role as the pandemic was beginning to destroy global energy demand and kneecap U.S. and European major oil companies. BP in 2020 suffered brutal losses and, like peers, slashed its dividend.

Since then, major oil companies have come roaring back with record profits, making them a target of ire from governments and consumers struggling with high energy prices amid Russia’s war in Ukraine. BP and other majors in the past year have showered investors with tens of billions of dollars in share buybacks and dividends, in response to shareholder demands for cash after years of lackluster returns.

BP has said it plans by 2030 to slash its fossil-fuel production by 40% from 2019 levels. Mr. Looney has set a target of increasing investments in what it calls “transition growth businesses” including renewable energy and convenience-store operations to around 50% of total capital spending by 2030, up from more than 40% by 2025. Mr. Looney and his lieutenants have said the company is balancing its deeper push into low-emission projects while still nurturing legacy cash cows like oil-and-gas production and trading.

In February 2022, executives sought to reassure investors by saying BP intends to sustain earnings from oil and gas at $30 billion to $35 billion annually, excluding taxes and other factors, through this decade despite the planned production cuts. They said BP would do that by cutting costs and focusing on high-margin production such as offshore drilling in the Gulf of Mexico.

That outlook compares with BP’s target to make more than $10 billion a year by 2030 from renewable energy, biogas and other businesses outside of oil-and-gas production.

Finance chief Murray Auchincloss a year ago told The Wall Street Journal in an interview that the fossil-fuel production cuts wouldn’t have a big impact on cash flow, “but there are still some parts of the sector that didn’t understand that.”

BP has argued that renewable-energy returns will prove more stable than oil-and-gas profit over the long haul, helping its strategy pay off.

But the path has been rocky. In 2020, BP spent $1.1 billion to acquire 50% stakes in two Northeastern U.S. offshore-wind developments from Norwegian rival Equinor ASA, an early player in offshore wind. The move marked BP’s entry into the offshore-wind market. Other wind-project developers and investors still consider the price BP paid as inflated.

BP said the stakes and its new strategic partnership with Equinor would open up opportunities elsewhere in the U.S. offshore-wind market. But project managers with other companies have seen BP shying away from expanding its U.S. offshore-wind ambitions as initially described, according to people familiar with the matter. BP balked at the last minute last year at joining Equinor in competing for wind-energy rights off California, some of the people say.

In October 2022, BP agreed to buy U.S. biogas producer Archaea Energy Inc. in a $4.1 billion deal including $3.3 billion in cash. It was BP’s biggest acquisition since 2018.

“One of the misconceptions about our strategy is that we’re going from oil to renewables. That is not what we are doing,” Mr. Looney said in a February 2022 podcast interview with Nicolai Tangen, head of Norges Bank Investment Management, the sovereign-wealth fund that invests Norway’s oil wealth and is one of BP’s biggest investors.

Mr. Looney went on to say that oil and gas remain core to BP and will help fund its “transition growth engines” like electric-vehicle charging and bioenergy. “Transition does not equal lower returns,” he said on the podcast.

Write to Jenny Strasburg at jenny.strasburg@wsj.com

Copyright © 2023 Dow Jones & Company, Inc.

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[Qualified Opinion] [graphic]

Qualified Opinion — 5/26/2022 4:58:11 PM

[Jon Koplik] WSJ -- BP to Exit From Stake in Russia’s Rosneft Following Pressure From U.K. .....

Jon Koplik — 2/27/2022 2:06:30 PM

WSJ -- BP to Exit From Stake in Russia’s Rosneft Following Pressure From U.K. ......................

Feb. 27, 2022
12:45 pm ET

BP to Exit From Stake in Russia’s Rosneft Following Pressure From U.K.

Divestment follows talk between CEO and U.K. official, could result in substantial loss

By Jenny Strasburg

BP PLC said Sunday it will exit its nearly 20% stake in Russian oil producer Rosneft, days after it was pressured to unload the holding by the U.K. government amid Russia’s invasion of Ukraine.

BP Chief Executive Bernard Looney and former CEO Bob Dudley will resign from Rosneft’s board, the British company said. The divestment could result in a charge of more than $20 billion for BP, depending on how it manages the exit. BP valued the Rosneft stake at $14 billion at the end of 2021, according to the company.

The potential charge includes $11 billion in accumulated foreign-exchange losses on BP’s books. A change in the nature of BP’s Rosneft relationship will affect how those losses are accounted for, the company said.

The abrupt move comes after Mr. Looney held a conversation Friday with Kwasi Kwarteng, British Secretary of State for Business, Energy and Industrial Strategy, a person familiar with the matter said. Mr. Kwarteng expressed deep concern about BP owning the stake.

BP board members held emergency meetings Friday and over the weekend to discuss the situation, according to a person familiar with the matter.

BP will be looking to exit from the stake at a tumultuous time for Russian companies, potentially affecting its ability to recover the $14 billion carrying value of the stake. A potential write-down would be based on the carrying value of the Rosneft stake at the end of the first quarter.

The U.K. company is the oil-and-gas majors most exposed to Russia, analysts say. BP’s 19.75% stake in Rosneft brought it $640 million in dividends in 2021. Analysts expected 2022 dividends to be worth well over $1 billion.

More to come...

Write to Jenny Strasburg at jenny.strasburg@wsj.com

Copyright © 2022 Dow Jones & Company, Inc.

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[Jon Koplik] WSJ -- BP Considers Spinning Off Iraq Operations ..................................

Jon Koplik — 6/11/2021 2:00:36 PM

WSJ -- BP Considers Spinning Off Iraq Operations .......................................

June 11, 2021

BP Considers Spinning Off Iraq Operations

Oil giant weighs whether to move its interest in the giant Rumaila oil field into a stand-alone company as it tries to pivot toward lower-carbon energy

By Sarah McFarlane and Benoit Faucon

LONDON -- BP PLC is working on a plan to spin off its operations in Iraq into a stand-alone company, according to people familiar with the matter, as the oil giant shuffles its assets and investment plans in its pivot toward lower-carbon energy.

The new company would hold BP’s interest in Iraq’s giant Rumaila oil field -- one of the world’s largest -- and be jointly owned by China National Petroleum Corp., one of the British company’s partners at the site, the people said. The new entity would hold its own debt, separate from BP, and distribute profits via dividends, the people added.

The plan aims to give BP more flexibility to invest in low-carbon energy by enabling it to reduce its spending on oil and gas, the people said.

Such a move would underscore how some European oil companies are backing away from decades of pioneering exploration in sometimes challenging locations to refocus on where future energy demand is expected to grow: low-carbon fuels and electricity.

The potential shift would have particular significance for BP because of its history in Iraq, dating to the 1920s. In 2009, BP was the first international oil business to return to Iraq after the U.S.-led invasion.

To advance its goal, BP would first need to secure the agreement of state-backed Basra Oil Company and Iraq’s national oil company, the State Organization for Marketing of Oil, or SOMO, which are part of the Rumaila Operating Organization.

BP’s plan for its Iraqi business is similar to what it recently said it was considering in Angola, the people familiar with the matter said.

BP and Italy’s Eni SpA last month said they had signed a memorandum of understanding to combine their oil and gas assets in Angola into a new jointly-owned company to save on costs and boost growth. The companies plan for the new entity to be self-funded, and have appointed advisers to help raise money for the new venture.

Any potential new company isn’t expected to change BP’s reporting of production and emissions for its Angola assets. It isn’t clear whether the plans for Iraq would affect BP’s production or emissions.

Consultants and analysts have said that they expect more oil companies to pursue similar deals as a way to free-up cash. Mature oil and natural gas fields, which don’t require large investments and provide a steady income, could be suited to such deals, they said.

“It’s the switch in mentality for the oil-and-gas operations from being a growth engine to a cash cow,” said Biraj Borkhataria, analyst at RBC Capital Markets.

Major European oil companies including BP, Royal Dutch Shell PLC and TotalEnergies SE have said they plan to reduce their dependence on fossil fuels in the coming years and curb emissions by shrinking their oil production and investing more in low-carbon energy.

BP last year committed to increasing its low carbon investments 10-fold to $5 billion by 2030, at the same time as reducing its oil and gas output by 40%.

Iraq’s Rumaila is one of the world’s largest oil fields and has been a cornerstone in BP’s portfolio. The company helped discover the field in 1953, and the site now accounts for roughly a third of Iraq’s annual crude production.

BP is one of Iraq’s largest foreign partners. The country has been attractive to major oil companies because its crude is relatively easy and cheap to extract, although political instability has at times tempered interest.

In 2009, BP and CNPC won the rights to develop Rumaila, securing a 20-year technical servicing contract, which was then extended by 5 years to December 2034. BP is the lead contractor with 47.6%, while PetroChina Co., the listed arm of CNPC, has 46.4% and SOMO has 6%

Iraq has seen a shuffling of oil-company interests in the past three years.

Shell handed over its Majnoon field operations to Basra Oil Co. in 2018 and more recently Exxon Mobil Corp. has sought to leave. Earlier this year, Exxon held talks to sell its position in the West Qurna 1 field to the government, according to people familiar with the matter. Exxon and the Iraqi government declined to comment on those talks.

Meanwhile, Chevron Corp. signed a memorandum of understanding with the government last year including exploration activities in Southern Iraq.

Ben Dummett contributed to this article.

Write to Sarah McFarlane at sarah.mcfarlane@wsj.com and Benoit Faucon at benoit.faucon@wsj.com

Copyright © 2021 Dow Jones & Company, Inc.

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[Jon Koplik] OGJ -- BP project now expected to last 68 (maybe more) years ......................

Jon Koplik — 4/20/2021 12:33:19 PM

OGJ -- BP project now expected to last 68 (maybe more) years ..............................................

"First oil flowed from the field in 1982."

"The company plans new wells, flank developments, and new technology to produce from the field up to 2050."

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Exploration & Development

Apr 19th, 2021

Aker BP advances Valhall modernization project with well plugging

Aker BP has completed plugging wells at Valhall field center as part of the modernization of the field as it aims to produce a total of two billion bbl from the North Sea field.

By OGJ editors

Aker BP has completed plugging wells at Valhall field center as part of the modernization of the field as it aims to produce a total of two billion bbl from the North Sea field.

The Maersk Invincible drilling rig has left Valhall field center, marking the end of several years of plugging operations, the operator said Apr. 19. A total of 30 old wells from the original drilling platform have been plugged over the course of three campaigns since 2014.

The original QP accommodation platform was removed in summer 2019 (OGJ Online, Dec. 8, 2020). Over the course of the next few years, the original drilling platform and process platform will also be removed from the field center. The original Hod wellhead platform, south of Valhall, will also be removed and replaced.

First oil flowed from the field in 1982. Since then, over 1 billion boe have been produced from the area -- more than three times as much as expected at start-up.

The company believes “considerable” resources remain. The company plans new wells, flank developments, and new technology to produce from the field up to 2050, said Valhall’s asset manager Ole Johan Molvig.

Aker BP originally estimated the plugging campaign to take 10 years at a cost of 15.5 billion kroner. The work was completed in 4 years and at a cost of 10.1 billion kroner.

Aker BP is operator with 90% interest. Pandion Energy holds the remaining 10%.

© 2021 Endeavor Business Media, LLC.

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[Jon Koplik] Bloomberg -- BP Swaps High Returns for a Cleaner Future with Unproven Profits .....

Jon Koplik — 2/9/2021 12:30:03 AM

Bloomberg -- BP Swaps High Returns for a Cleaner Future with Unproven Profits ............

February 8, 2021

BP Swaps High Returns for a Cleaner Future with Unproven Profits

By Laura Hurst

One week and two deals later, BP Plc has cemented the view that for an oil and gas company to go green, it must sacrifice profits.

The energy major announced on Monday that together with a German utility, would pay £462 million ($635 million) annually for the next four years to develop two wind farms off the west coast of England. Just a week earlier, BP sold a stake in in its giant low-cost, Khazzan natural gas field in Oman, which has double the returns.

“For the doubters, those that think BP are going to leave money on the table and destroy value, these recent deals are ammunition to that argument,” says Luke Parker, Vice President of Corporate Research at Wood Mackenzie Ltd.

As European majors have promised to clean up their act and ramp up low-carbon energy, BP investors and analysts have questioned whether the firm is at risk of overpaying.

BP aims to cut its oil and gas production by 40%, increase low-carbon spending to $5 billion a year and produce 50 gigawatts of renewable energy by the end of the decade. The firm has said its trading unit, access to low-cost funding and experience in large projects will enhance returns from renewable power.

Khazzan, in which BP retains a 40% stake, will have high double-digit returns over the full life of the project, lower carbon intensity than many other oil and gas projects, and generates cash in low price environments. Conversely, the U.K. wind deal has high upfront costs, lower and unproven returns of 8% to 10%.

BP has labored over the past year to convince analysts and investors that it can generate high returns while eliminating its emissions. “Deals that we’ve seen in the past two weeks suggests the model is tough,” said Parker.

© 2021 Bloomberg L.P.

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[Jon Koplik] Oil & Gas Journal / BP plans renewable hydrogen production at German refinery .....

Jon Koplik — 11/16/2020 3:13:21 PM

Oil & Gas Journal / BP plans renewable hydrogen production at German refinery ...................

Nov 11th, 2020

BP plans renewable hydrogen production at German refinery

BP PLC and Ørsted AS of Denmark and have agreed to jointly develop a proposed large-scale renewable hydrogen project at subsidiary BP Europa SE’s 100,000-b/d Lingen refinery in northwest Germany’s Emsland region.

By Robert Brelsford

BP PLC and Ørsted AS of Denmark and have agreed to jointly develop a proposed large-scale renewable hydrogen project at subsidiary BP Europa SE’s 100,000-b/d Lingen refinery in northwest Germany’s Emsland region.

Scheduled to become operational in 2024, the Lingen Green Hydrogen (LGH) project will include a 50-Mw electrolyzer and associated infrastructure capable of generating 1 tonne/hr -- or nearly 9,000 tonnes/year -- of renewable hydrogen sufficient to replace about 20% of the refinery’s current fossil-based hydrogen consumption, BP and Ørsted said.

The LGH project -- which would reduce carbon dioxide (CO2) equivalent emissions by about 80,000 tpy in its initial phase -- also intends to support the partners’ longer-term ambition to build more than 500 Mw of renewable hydrogen capacity at Lingen to meet the refinery’s entire hydrogen demand, as well as provide feedstock for future synthetic fuel production at the site.

Designed to replace the Lingen refinery’s current CO2 emissions-generating method of producing hydrogen via natural gas reforming, the proposed LGH project’s electrolysis-based system -- which will be powered by an Ørsted North Sea offshore wind farm -- would split water into hydrogen and oxygen gases to produce zero-emissions green hydrogen.

Alongside green hydrogen production, the project also will focus on maximizing electrolyzer-system efficiency to enable flexible operation and complete integration into the refinery. To accommodate the latter objectives, scope of the engineering and commercial studies will include assessments for sustainable uses of the main by-products of electrolysis, primarily oxygen and low-grade excess heat, Ørsted said.

Already having jointly applied to fund the LGH project with the EU Innovation Fund -- currently one of the largest funding programs for innovative low-carbon technologies that focuses particularly on energy intensive industries -- BP and Ørsted will now work together to further define the project and agree on definitive documents for a targeted a final investment decision (FID) in early 2022.

“Heavy industries such as refineries use large quantities of hydrogen in their manufacturing processes. They will continue to need hydrogen, but replacing the currently fossil-based hydrogen with hydrogen produced from renewable energy can help these industries dramatically lower their CO2 footprint,” said Martin Neubert, Ørsted’s executive vice-president.

“But first, renewable hydrogen has to become cost competitive with fossil-based hydrogen, and for that we need projects such as [the LGH project to] demonstrate the electrolyser technology at large scale and showcase real-life application of hydrogen based on offshore wind,” Neubert added.

For BP, the project comes as part of its strategy to develop its hydrogen business in line with the operator’s goal of becoming a net-zero company by 2050 or sooner.

“Hydrogen will have an increasing role to play in meeting the energy demands of a decarbonizing world. And we are determined to build a leading position in this emerging industry,” said Dev Sanyal, executive vice-president for BP’s gas and low-carbon business.

In addition to accelerating a major reduction in the Lingen refinery’s emissions and building BP’s experience in large-scale green hydrogen production and deployment, the LGH project has the potential to play an important role in the development of a hydrogen economy, in Germany and beyond, according to Sanyal

© 2020 Endeavor Business Media, LLC.

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[Jon Koplik] WSJ -- BP teams up with Ørsted to produce hydrogen using wind power ...............

Jon Koplik — 11/16/2020 3:06:49 PM

WSJ -- BP teams up with Ørsted to produce hydrogen using wind power ...................................

Nov. 10, 2020

BP Steps Up Green Drive With Hydrogen Deal

Oil major teams up with Ørsted to produce hydrogen using wind power

By Sarah McFarlane

LONDON -- BP PLC is partnering with renewable energy giant Ørsted A/S to produce hydrogen from wind power, the oil major’s first big project in a sector that it -- and the wider industry -- believe will play a key role in the transition to low-carbon energy.

Using renewable power such as wind and solar to produce hydrogen, instead of fossil fuels such as gas or coal, is expected to be important for reducing global carbon emissions -- although it remains a more expensive option. While hydrogen only makes up a small amount of the world’s energy use -- mostly for refining and chemical production -- it is responsible for significant emissions.

Under the deal announced Tuesday, BP said it would use wind energy from Ørsted’s North Sea wind farm to produce hydrogen for its Lingen refinery in northwest Germany. The two companies intend to build a 50 megawatt electrolyser, powered by wind, to split water into hydrogen and oxygen gases without generating carbon emissions.

The partnership is part of a broader plan BP detailed in September to cut its oil and gas production by 40%, while increasing spending in low-carbon energy, including green hydrogen. It is targeting a 10% market share of hydrogen produced using renewables -- or natural gas in cases where the emissions have been captured and stored -- within the next decade.

Other oil companies also have plans to reduce emissions from hydrogen. Royal Dutch Shell PLC plans to increase its green hydrogen production 10-fold at its Rhineland refinery in Germany by 2030. Earlier this year, Repsol SA said it would build a fuel plant, which uses green hydrogen in Northern Spain.

Advocates say that as well as reducing emissions, green hydrogen could help address the storage issues facing renewable energy, which is typically generated when the wind blows or the sun shines, regardless of whether there is demand for the power. By using excess renewable power to produce hydrogen, the energy could be stored for later use.

One challenge remains, however, cost. Producing hydrogen using renewable energy is more expensive than that using fossil fuels, and analysts say government support will be key to its adoption. While the costs of electrolysers and renewable electricity have been coming down, green hydrogen still doesn’t compete with natural-gas based hydrogen.

To support the project in Germany, BP and Ørsted have applied for funding from a European Union innovation fund that focuses on projects aimed at reducing emissions.

The companies said they plan to make a final investment decision in early 2022, and anticipate the project could be operational by 2024. BP didn’t disclose financial details of the project.

“Renewable hydrogen has to become cost competitive with fossil-based hydrogen, and for that we need projects such as this,” said Dev Sanyal, BP’s executive vice president for gas and low carbon energy, adding that the project would demonstrate the technology at a large scale.

Write to Sarah McFarlane at sarah.mcfarlane@wsj.com

Copyright © 2020 Dow Jones & Company, Inc.

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[Qualified Opinion]

Qualified Opinion — 11/10/2020 9:13:00 AM

[Qualified Opinion] Liberal media is stirring up the nut cases by creating fake news on climate chan...

Qualified Opinion — 2/13/2020 10:54:30 AM

Liberal media is stirring up the nut cases by creating fake news on climate change.

[Qualified Opinion] Mental disorder called climate change has taken over this company.

Qualified Opinion — 2/13/2020 9:20:02 AM

[Jon Koplik] WSJ -- BP to Exit Alaska With $5.6 Billion Sale ...................................

Jon Koplik — 8/28/2019 1:14:58 AM

WSJ -- BP to Exit Alaska With $5.6 Billion Sale ......................................

Aug. 27, 2019

BP to Exit Alaska With $5.6 Billion Sale

British oil company is selling all its Alaska oil and pipeline holdings to Hilcorp Energy

By Miguel Bustillo and Bradley Olson

BP PLC is exiting Alaska after six decades, marking the latest blow to the state’s oil industry, which has diminished amid the rise of shale drilling in the continental U.S.

The British oil company is selling all of its Alaska assets, including its share of the giant Prudhoe Bay oil field and its interests in the Trans-Alaska Pipeline System, to Hilcorp Energy Co. for $5.6 billion. Privately held Hilcorp, based in Houston, is Alaska’s largest private operator.

For BP, it is the end of an era. The London company and its predecessors have been producing and exploring for Alaskan oil for decades, and participated in many of the largest discoveries on the state’s remote northern edge. BP was also a key player behind the development of the 800-mile Trans-Alaska Pipeline, which carries crude to the Port of Valdez.

“Alaska has been instrumental in BP’s growth and success for well over half a century and our work there has helped shape the careers of many throughout the company,” BP Chief Executive Bob Dudley said.

“However, we are steadily reshaping BP and today we have other opportunities, both in the U.S. and around the world, that are more closely aligned with our long-term strategy,” he added.

On its own, Alaska once pumped two million barrels a day, enough crude to rival some members of the Organization of the Petroleum Exporting Countries. Now, Alaska is only the sixth-largest producing state in the U.S., behind Texas, North Dakota, New Mexico, Oklahoma and Colorado, all of which have seen output surge due to fracking.

“Psychologically, it’s a hit to Alaska,” said Larry Persily, a journalist and former federal and state official working on oil and gas issues in the state. “BP and its predecessor companies have been here for decades, and Alaska clearly isn’t as important in global oil as it used to be.”

Wood Mackenzie analyst Rowena Gunn said other major companies could follow BP in leaving the state. “This will not be the last deal in the region,” she said. Exxon Mobil Corp. is the biggest remaining oil-and-gas company in the state.

Yet even with the departure of a giant company like BP, the state has seen renewed interest from operators after a number of large discoveries in recent years. ConocoPhillips , Spain’s Repsol SA, Italy’s Eni SpA and small explorer Armstrong Oil & Gas have all been involved in identifying new opportunities in Alaska.

Hilcorp will pay BP $4 billion in the short term and a $1.6 billion earnout from the assets afterward, the company said. They will be part of the company’s Hilcorp Alaska affiliate. The deal is subject to state and federal approval, and the companies expect it to close by next year.

“Energy is a cornerstone of the Alaskan economy and this investment will help drive growth in local energy production, jobs and state and local revenue for many years to come,” said Hilcorp Energy President Jason Rebrook. “Hilcorp has a proven track record of bringing new life to mature basins.”

Hilcorp has acquired BP assets in Alaska before, including a 2014 deal for BP’s interests in four oil fields and associated pipelines. Mead Treadwell, a former Alaska lieutenant governor, said he was happy to see Hilcorp continue to expand in the state.

“Hilcorp has proved itself in Alaska as a low-cost operator that is very, very interested in expanding production,” he said.

The sale is part of a larger BP initiative to divest $10 billion in assets over 2019 and 2020, the company said.

BP said it started working in Alaska in 1959. It drilled the initial confirmation well for the Prudhoe Bay oil field in 1968, and began producing oil from it in 1977. The oil field has to date pumped 13 billion barrels, making it the most prolific in American history, the company said. BP has remained its operator and currently has a 26% working interest in the field.

BP also said it owns exploration lease interests in the Arctic National Wildlife Refuge, among other Alaska holdings. But the company’s production in the region has fallen over time. BP estimates its net oil production from Alaska will average 74,000 barrels a day this year.

-- Russell Gold contributed to this article.

Write to Miguel Bustillo at miguel.bustillo@wsj.com and Bradley Olson at Bradley.Olson@wsj.com

Copyright © 2019 Dow Jones & Company, Inc.

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[Jon Koplik] Bloomberg -- BP Exits Alaska After 60 Years in $5.6 Billion Hilcorp Sale ..........

Jon Koplik — 8/28/2019 12:29:12 AM

Bloomberg -- BP Exits Alaska After 60 Years in $5.6 Billion Hilcorp Sale .............................

August 27, 2019

BP Exits Alaska After 60 Years in $5.6 Billion Hilcorp Sale

By Kevin Crowley

British oil major says state isn’t a competitive investment

Alaska’s oil output has slumped since heyday in late 1980s

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BP Plc agreed to sell its entire business in Alaska to closely held Hilcorp Energy Co. for $5.6 billion, ending a six-decade presence in the state as oil production there declines.

The deal includes BP’s operating stake in Prudhoe Bay, the largest-producing oilfield in U.S. history, as well as all its Alaskan pipelines, London-based BP said Tuesday in a statement. It makes Hilcorp, the oil company founded by Texas billionaire Jeffery Hildebrand, the second-largest producer in the state behind ConocoPhillips.

It’s the latest example of a supermajor retiring from the frontier oil discoveries of the late 20th century that cushioned them from OPEC’s ascendancy and forced them to learn to drill in some of the harshest and most forbidding corners of the globe.

Alaska, like Canada’s oil sands and the North Sea, is receding into a second-tier oil province as field depletion, cost-cutting and the rise of shale diminish the appeal of those resources.

The state’s oil output has slumped from its heyday in the late 1980s as discoveries dried up and major producers sought easier-to-produce crude elsewhere, most recently from shale rock in Texas. Hilcorp, along with ConocoPhillips, is one of the few big oil companies still interested in investing fresh capital in the state, which is home to protected ecosystems.

BP wants “to create a more growth-oriented asset base,” Pavel Molchanov, a Houston-based analyst at Raymond James Financial Inc., said by email. Alaska “is one of the world’s most mature oil-producing areas.”

Wood Mackenzie Ltd. values BP’s assets at a “slight premium” to the $5.6 billion purchase price, almost a third of which will be paid subject to production over time. But for BP, the sale is strategic.

“We are steadily reshaping BP and today we have other opportunities, both in the U.S. and around the world, that are more closely aligned with our long-term strategy and more competitive for our investment,” BP Chief Executive Officer Bob Dudley said in the statement.

The sale forms the majority of BP’s two-year, $10 billion divestment plan. It includes the stake in the Trans-Alaska Pipeline System which has been running below capacity for years as oil production in the state has declined. BP American depositary receipts rose as much as 1.1% in New York trading.

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What Bloomberg Intelligence Says

The deal “is logical and should be well received, given its indebted balance sheet exceeds the guidance range. The move is also consistent with the company’s long-term strategic shift toward shale and gas/LNG exposure from legacy conventional oil.”

-- Will Hares, senior industry analyst

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In the last five years, Hilcorp has bought more than $6 billion oil and gas assets, and produced about 108,000 barrels of oil equivalent per day of liquids, according to its website. The company in 2017 acquired assets in the San Juan Basin of New Mexico for $3 billion, and has holdings in Wyoming and Alaska.

Prudhoe Bay has produced about 13 billion barrels over its life and has a further 1 billion barrels of potential, BP said.

Exxon Mobil Corp. may be next to sell Alaskan assets, Wood Mackenzie said. The oil major wants to raise $15 billion from sales globally by the end of 2021. In the past few years Anadarko Petroleum Corp., Pioneer Natural Resources Co. and Marathon Petroleum Corp. has sold out of the state.

Alaska’s annual production peaked at 2 million barrels a day in 1988, the year before the Exxon Valdez oil spill. Last year, it averaged 479,000 barrels a day.

The U.S. Interior Department is preparing to sell drilling rights in the Arctic National Wildlife Refuge later this year. The refuge’s coastal plain, known as the 1002 area, is thought to contain billions of barrels of oil, but tapping it was off-limits for decades until 2017, when Congress ordered the government sell drilling rights there under the premise it would raise money to offset tax cuts.

BP was one of the original partners in building the 800-mile (1,300-kilometer) Trans-Alaska Pipeline System in 1977, designed to bring oil from the North Slope to the port of Valdez on Alaska’s southern coast. It was one of the largest privately funded construction projects in history. BP holds a 49% stake in the pipeline, with ConocoPhillips, Exxon Mobil Corp. and Unocal Pipeline Co. holding the remainder.

-- With assistance by Rachel Adams-Heard, Jennifer A Dlouhy, Tina Davis, and Joe Carroll

© 2019 Bloomberg L.P.

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[Jon Koplik] OGJ -- Hilcorp to acquire BP’s Alaska business in $5.6 billion deal ...............

Jon Koplik — 8/27/2019 11:35:13 PM

OGJ -- Hilcorp to acquire BP’s Alaska business in $5.6 billion deal .....................

Aug 27th, 2019

Hilcorp to acquire BP’s Alaska business in $5.6 billion deal

By OGJ editors

Hillcorp Alaska, Anchorage, has entered into a deal to acquire the entirety of BP Alaska’s operations and interests for $5.6 billion.

Under the terms of the agreement, Hilcorp’s payment will comprise $4 billion payable near-term and $1.6 billion through an earnout thereafter. Subject to state and federal regulatory approval, the transaction is expected to be completed in 2020.

For BP, the transaction -- which includes interests in giant Prudhoe Bay field and the Trans Alaska Pipeline System (TAPS) -- adds to the progress towards the firm’s 2-year, $10-billion divestment program.

The sale includes BP’s entire upstream and midstream business in the state, including BP Exploration (Alaska) Inc., which owns all of BP’s upstream oil and gas interests in Alaska, and BP Pipelines (Alaska) Inc.’s interest in TAPS.

BP Group Chief Executive Bob Dudley, said the company is “reshaping” to focus on “other opportunities, both in the US and around the world, that are more closely aligned with our long-term strategy and more competitive for our investment.”

BP began working in Alaska in 1959, drilling the confirmation well for Prudhoe Bay oil field in 1968 and in the mid-1970s helped build the 800-mile TAPS project. BP began producing oil from Prudhoe Bay in 1977. To date, the giant oil field has produced more than 13 billion bbl of oil and is estimated to have the potential to produce more than 1 billion bbl more.

BP’s net oil production from Alaska this year is expected to average 74,000 b/d. BP operates Prudhoe Bay, with a working interest of 26%, and holds non-operating interests in producing Milne Point and Point Thomson fields. It also holds non-operating interests in the Liberty project and exploration lease interests in the Arctic National Wildlife Refuge. In addition to shares in TAPS and its operator the Alyeska Pipeline Service Co., BP is divesting its midstream interests in the Milne Point Pipeline and the Point Thomson Pipeline.

Roughly 1,600 employees are currently associated with BP’s Alaska business.

Hilcorp has been operating in Alaska since 2012 and currently is the largest private oil and gas operator in the state, operating more than 75,000 boe/d in gross production. In 2014 Hilcorp purchased interests from BP in four operated Alaska North Slope oil fields (OGJ Online, Apr. 22, 2014).

“Our exit from Alaska does not in any way diminish BP’s commitment to America,” Dudley said. “We remain very bullish on the US energy sector. In just the last 3 years we have invested more than $20 billion in the US and we will continue to look at further investment opportunities here.”

In this year’s second quarter, BP’s net oil and gas production from the US averaged more than 921,000 boe/d from major interests in Alaska, onshore the Lower 48, and the deepwater Gulf of Mexico.

Late last year BP acquired a portfolio of onshore US oil and gas interests from BHP for $10.5 billion, adding 190,000 boe/d net production. BP also continues to develop its business in the deepwater gulf, bringing on a series of new projects on its major producing assets. The $9-billion Argos platform in Mad Dog field is expected to come on stream in 2021.

BP’s interests in Alaska include:

• Prudhoe Bay, 26% (operator BP).

• Milne Point, 50% (operator Hilcorp).

• Point Thomson, 32% (operator ExxonMobil Corp.).

• Liberty project, 50% (operator Hilcorp).

• Non-operating interests in exploration leases in ANWR.

• TAPS, 49%.

• Alyeska Pipeline Service Co., 49%.

• Point Thomson Export Pipeline, 32%.

• Milne Point Pipeline, 50%.

• Prince William Sound Oil Spill Response Corp., 25%.

© 2019 Endeavor Business Media, LLC.

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[Jon Koplik] WSJ -- U.K. Navy Thwarts Iranian Attempt to Block BP Tanker .......................

Jon Koplik — 7/12/2019 1:17:54 AM

WSJ -- U.K. Navy Thwarts Iranian Attempt to Block BP Tanker ..............................

July 11, 2019

U.K. Navy Thwarts Iranian Attempt to Block BP Tanker

Iranian ships turned away after a British warship intervened, U.K. says

By Rory Jones in Dubai and Max Colchester in London

A British warship trained its guns on three Iranian vessels that tried to block the passage of a U.K.-flagged oil tanker through the Persian Gulf, the country’s Defense Ministry said, a confrontation that comes amid heightened tensions between Washington and Tehran.

The three Iranian ships tried on Wednesday to impede the British Heritage, a tanker carrying oil for British oil giant BP PLC, but were turned away by the HMS Montrose, the British Defense Ministry said in a statement Thursday.

The U.S. and U.K. have accused Iran’s Islamic Revolutionary Guard Corps of mounting assaults on vessels carrying oil through the Strait of Hormuz in recent months. However, Wednesday’s incident marks the first time since tensions flared earlier this year between the U.S. and Iran that a Western warship has come close to military engagement with Iranian naval forces.

Sepahnews.com, an Iranian news website tied to the Islamic Revolutionary Guard Corps, a powerful military group in Iran, denied the unit’s forces had tried to detain the ship.

The British government didn’t identify the types of Iranian vessels involved and didn’t accuse the ships of seeking to seize the tanker. It wasn’t clear why the Iranian vessels were near the tanker or what their motives were.

The U.S. military was aware of the incident, said Navy Capt. Bill Urban, a spokesman for the U.S. Central Command. “Threats to international freedom of navigation require an international solution. The world economy depends on the free flow of commerce, and it is incumbent on all nations to protect and preserve this linchpin of global prosperity.”

The incident could accelerate a U.S. attempt to build a coalition of states to share the burden of protecting commercial vessels near Iranian waters. It could also further rattle the oil market and destabilize shipping through the Strait of Hormuz, through which about a third of the world’s seaborne crude moves from countries such as Iraq, Saudi Arabia and the United Arab Emirates.

Front-month West Texas Intermediate futures recently were up 0.5% to $60.74, while Brent futures were 0.6% higher at $67.40.

Iran and the U.S. have been locked in a bitter standoff since the spring. The White House last year pulled out of a 2015 agreement that sought to contain Iran’s nuclear capabilities and in April said it would use sanctions to force “Iran’s oil exports to zero.” The Trump administration has slapped sanctions on Iranian individuals and institutions, including the IRGC, in an effort to force Tehran to cease aggressive activities in the Middle East and negotiate a new nuclear pact.

Tehran has responded by taking steps to breach the 2015 agreement and modestly expand its nuclear program.

Iranian officials have threatened to retaliate, with one senior official suggesting seizing a British ship in the Persian Gulf after U.K. forces last week commandeered an Iranian ship off the coast of Gibraltar. That ship was carrying oil bound for Syria in what U.K. officials said breached European Union sanctions on sales of oil to the country. Tehran has denied that the tanker was headed to Syria and called its seizure illegal because Iran isn’t subject to a European oil embargo.

Iranian President Hassan Rouhani on Wednesday warned the U.K., according to Iran’s Press TV. “You are the ones initiating insecurity, and will come to realize its consequences in the future,” he said.

On Thursday, Gen. Ali Fadavi, a deputy guards commander, said the U.K. and U.S. “will regret” detaining the ship carrying Iranian cargo, according to the semiofficial Fars news agency.

“If the enemies would have done the smallest calculation, they would not have taken such action,” he said. He didn’t comment on the U.K.’s allegations that Iranian vessels tried to block the British Heritage’s passage through the Persian Gulf a day earlier.

The British Heritage had been on its way to pick up a cargo of oil from Basra port in southern Iraq when it changed course earlier this week, without loading, over fears it would be seized by Iranian forces following Tehran’s threats. The tanker stopped off the coast of Saudi Arabia, and was located off the coast of Oman early Thursday morning, according to MarineTraffic.com.

After the three Iranian ships approached the British Heritage, the HMS Montrose trained its guns at the vessels and issued verbal warnings for them to back away, said the U.K. Defense Ministry. The three ships complied.

A spokesman for the ministry added that the British Heritage had since left the Persian Gulf.

Britain has maintained a naval presence in the region for some time. The HMS Montrose has been in the Persian Gulf since late 2018. The U.K. currently has four minesweepers deployed there.

A spokeswoman for the Defense Ministry said she wouldn’t comment on whether the government planned to increase its naval presence in the Gulf. BP declined to comment further on the event.

BP is a partner in the development of Iraq’s Rumaila, the world’s third-largest producing field, and it shipped around 50,000 barrels a day of Iraqi oil in 2018, via the Strait of Hormuz.

“We’ve just got to be really careful about our ships,” BP Chief Executive Bob Dudley said at an event at London-based think tank Chatham House on Wednesday, in relation to Iran’s threats.

The U.S. also has accused Iran of attacking tankers in the Gulf of Oman -- which Tehran denied -- and said Iran shot down a U.S. spy drone in the area. Tehran said the unmanned aerial vehicle was inside Iranian airspace when it was downed.

The U.K. has backed the U.S. assertion that Iran attacked the ships. But London has been at odds with the White House over its decision to pull out of the nuclear deal, and British officials are working with European nations on how to salvage the accord.

The attacks on tankers have roiled oil markets and increased the costs of transporting crude and other products in and out of the Persian Gulf.

The U.S. has worked in recent weeks on a plan for deterring attacks on tankers that calls for ships from Arab, Asian and other foreign nations to stand watch in the Persian Gulf and the Gulf of Oman while maritime patrol planes fly overhead.

Saudi Arabia and the U.A.E., which export a large amount of oil through the Strait of Hormuz, have backed such a plan.

“This idea has to be thought out,” said Abdulkhaleq Abdulla, a political scientist and former professor in the U.A.E. “Gulf states would be happy to see this internationalization of Gulf security.”

Military analysts say the threat is clear. The Revolutionary Guard Corps is equipped to swarm hostile vessels with fast boats armed with torpedoes and short-range missiles and small patrol craft equipped with machine guns and rocket launchers.

Military escorts in the region have a precedent. During the Iran-Iraq war in the 1980s, the two countries attacked each other's ships in the Gulf and Iran eventually began targeting foreign-flagged vessels. The assaults subsided when the U.S. escorted and re-flagged foreign tankers under its ensign.

-- Aresu Eqbali in Tehran and Sarah McFarlane in London contributed to this article.

Write to Rory Jones at rory.jones@wsj.com and Max Colchester at max.colchester@wsj.com

Copyright © 2019 Dow Jones & Company, Inc.

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[Jon Koplik] Bloomberg -- BP Surges as Profit Exceeds Expectations and Returns Get a Boost .....

Jon Koplik — 2/5/2019 2:19:37 PM

Bloomberg -- BP Surges as Profit Exceeds Expectations and Returns Get a Boost ...............

Feb. 5, 2019

BP Surges as Profit Exceeds Expectations and Returns Get a Boost

-----------------------

Return on capital, reserve replacement beat rival Shell

Shares climb as much as 5.5% in London, the most in 3 years

CEO Bob Dudley says it’s been a good quarter and a good year for BP.

By Kelly Gilblom

BP Plc joined its Big Oil peers by giving investors a positive surprise, exceeding profit estimates and earning better returns than its closest European rival. Shares surged by the most in almost three years.

New projects delivered an increase in oil and gas output, while the company also worked its existing fields and refineries more efficiently than ever. That helped offset the impact of a slump in crude prices in the fourth quarter.

The better-than-expected earnings should give shareholders some comfort after BP took on more debt to pay for a swath of U.S. shale assets, its biggest deal in 20 years. The company’s facilities were still able to churn out cash even as the oil market turned south late last year.

While higher leverage gives BP less flexibility than its peers should the commodities cycle worsen again, so far prices have rebounded swiftly this year. Its willingness to spend money delivered six major new projects in 2018, increasing oil and gas output 2.4 percent to 3.683 million barrels of oil equivalent a day, the first of several years of forecast growth.

“It’s been a good quarter, it’s been a good year,” Chief Executive Officer Bob Dudley said in a Bloomberg television interview on Tuesday. “The best year on safety, which means reliable operations, which leads to good financial results.”

Investors seemed to agree, sending BP shares as much as 5.5 percent higher, the biggest intra-day jump since February 2016. The stock traded up 5.1 percent at 546.80 pence as of 12:05 p.m. in London.

Continuing Recovery

BP's rising output and efficiency offset the effect of falling oil prices

The U.K. oil major said adjusted net income was $3.48 billion in the fourth quarter, beating analyst estimates of $2.64 billion. Profit for the full year was $12.7 billion, as high as when oil was trading close to $100 a barrel.

Upstream facilities such as oil platforms ran with record reliability of 96 percent, the company said. Return on average capital employed was 11.2 percent last year, up from 5.8 percent in 2017. Royal Dutch Shell Plc’s comparable number was 7.6 percent.

Refining throughput was also the highest ever and continued to benefit from access to relatively cheap crude in North America. BP said its downstream business had a record fourth quarter, while the unit’s full-year underlying earnings before interest and tax were $7.56 billion. That beat even 2015, when a slump in crude prices delivered a stellar year for global refining and trading.

“We see this as a strong set of results,” RBC Capital Markets analyst Biraj Borkhataria said in a note. “We see the right balance of growth, longevity and defensiveness in the business.”

Oil-Spill Penalties

BP faces a trickier task balancing output growth with financial discipline than some of its peers. It’s still recovering from the 2010 Deepwater Horizon catastrophe, which killed 11 people and cost it more than $60 billion in penalties and compensation. Payments for the disaster are ongoing, but winding down. They reached $3.2 billion in 2018 and are likely to fall to $2 billion this year, the company said.

Cash outflows to pay for Deepwater Horizon have been the main reason why debt has reached its highest level in at least a decade, Chief Financial Officer Brian Gilvary said in a phone interview. Gearing, or the ratio of net debt to total equity, rose to 30.3 percent last quarter.

BP has said indebtedness will fall as new projects come online and cash flow rises, although that will now happen more slowly than previously anticipated. In the first half of this year, much of the company’s cash will be dedicated to completing its $10.5 billion purchase of shale assets from BHP Billiton Ltd.

In the second half, those payments should slow, while divestment proceeds will roll in. BP plans to sell as much as $6 billion of older U.S. onshore fields to reduce debt accrued in the purchase. It will also dispose of about $2 billion of assets in other areas both this year and next. The company exceeded its $3 billion divestment target for 2018.

Tighter Market

Gilvary said BP is able to cut debt, repurchase shares and fund capital expenditure with oil at $50 a barrel. He sees crude remaining around $60 to $65 a barrel over the next year amid tightening supply, citing output difficulties in Venezuela and Libya.

“Because our balance is at $50, we’re in pretty good shape,” Gilvary said. “The price looks pretty constructive around $60, $65.”

The company is still focused on spending discipline and will keep its organic capital-expenditure budget within $15 billion to $17 billion this year, helping gearing to fall back below 30 percent. Three months ago, BP told investors to expect gearing to return to the middle of its 20 percent to 30 percent target range by the end of 2019. On Tuesday, it said that will now happen in 2020.

"We’ll bring the gearing back down,” Dudley said. “I’m not concerned about ticking outside the range a little bit.”

-- With assistance by Javier Blas

© 2019 Bloomberg L.P.

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[Qualified Opinion] BP starts up Clair Ridge production offshore UK worldoil.com

Qualified Opinion — 11/23/2018 4:29:27 PM

[Qualified Opinion] Saudi Arabia is slashing oil shipments to US, a tactic that boosts prices and ma...

Qualified Opinion — 11/17/2018 4:12:05 PM

Saudi Arabia is slashing oil shipments to US, a tactic that boosts prices and may rile Trump

cnbc.com

[Qualified Opinion] Riyadh and OPEC likely to ignore Trump’s entreaties and tighten supplies theara...

Qualified Opinion — 11/17/2018 4:06:35 PM

Riyadh and OPEC likely to ignore Trump’s entreaties and tighten supplies

thearabweekly.com

[Jon Koplik] OGJ -- BP starts production from Thunder Horse Northwest expansion project ........

Jon Koplik — 10/23/2018 12:10:44 AM

OGJ -- BP starts production from Thunder Horse Northwest expansion project .....................

10/18/2018

BP starts production from Thunder Horse Northwest expansion project

HOUSTON

By OGJ editors

BP PLC has started production from the Thunder Horse Northwest expansion project in the deepwater Gulf of Mexico, boosting production at the Thunder Horse facility by an estimated 30,000 boe/d at its peak and taking gross output from the oil field to more than 200,000 boe/d.

Originally planned for start-up in early 2019, the expansion came online 4 months ahead of schedule and 15% under budget

The project adds a subsea manifold and two wells tied into existing flow-lines 2 miles north of the Thunder Horse platform and is the fourth upstream major project to begin production for BP globally so far this year.

In 2017, an expansion of Thunder Horse’s south field -- a 4-well tie-back to the floating hub -- boosted gross production at the field by more than 50,000 boe/d (OGJ Online, Jan. 23, 2018). The year before, BP started up a major water injection project at Thunder Horse to further enhance oil production from the field.

The Thunder Horse platform is in more than 6,000 ft of water and began production in June 2008 (OGJ Online, Dec. 22, 2008). It has the capacity to handle 250,000 bbl gross of oil and 200 MMcfd gross of natural gas. The facility continued to operate during construction and installation of the subsea production and pipeline system.

Thunder Horse is operated by BP with 75% working interest. Partner ExxonMobil Corp. holds the remaining interest.

Copyright © 2018: PennWell Corporation.

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[Jon Koplik] OGJ -- BP, partners start Shah Deniz 2 offshore Azerbaijan ........................

Jon Koplik — 7/3/2018 12:40:44 PM

OGJ -- BP, partners start Shah Deniz 2 offshore Azerbaijan .............................

07/02/2018

BP, partners start Shah Deniz 2 offshore Azerbaijan

By Paula Dittrick
OGJ Upstream Technology Editor

BP PLC and its partners announced they started natural gas production from Shah Deniz Phase 2 offshore Azerbaijan. The $28-billion project is the first Caspian Sea subsea development.

Shah Deniz 2, expected to produce 16 billion cu m of gas/year, is the starting point for the Southern Gas Corridor series of pipelines that will deliver gas from the Caspian Sea directly to European markets for the first time from 2020.

Shah Deniz is BP’s largest gas discovery. The giant field, found in 1999, was estimated to hold 1 trillion cu m of gas. It covers 860 sq km. The first phase of field development, Shah Deniz 1, began production in 2006 and currently supplies gas to Azerbaijan, Georgia, and Turkey.

BP is the operator with 28.8% interest. Partners are SOCAR with 16.7%, Petronas 15.5%, Lukoil 10%, NICO 10%, and TPAO 19% interest.

BP comments

Shah Deniz 2 is BP’s largest new upstream project in 2018. It is the second of six project startups that BP plans this year. The first was Atoll in Egypt. This series of developments stems from 2017’s seven major project completions.

At plateau, Shah Deniz 2 is expected to produce 16 billion cu m/year of gas incrementally to current Shah Deniz production. Together with output from the first phase of development, total production from the Shah Deniz field will be as much as 26 billion cu m/year of gas and as much as 120,000 b/d of condensate.

“Shah Deniz 2 is one of the biggest and most complex new energy projects anywhere in the world, comprising major offshore, onshore, and pipeline developments,” said Bob Dudley, BP group chief executive. “BP and our partners have safely and successfully delivered this multidimensional project as designed, on time and on budget.”

The project includes 26 subsea wells, a subsea production system, two bridge-linked offshore platforms and 500 km of subsea flowlines. Gas is transported to the onshore Sangachal terminal near Baku, which had new processing and compression equipment installed as part of the project.

The project also includes expansion of the South Caucasus Pipeline in Azerbaijan and Georgia, and two new compressor stations and a metering station in Georgia.

BP said Shah Deniz 2 is key to delivering the 900,000 boe of new production that it expects from new upstream major projects by 2021.

From the South Caucasus pipeline, gas is transported across Turkey through the new Trans-Anatolian Pipeline, which was inaugurated in June. The Trans-Adriatic Pipeline, when complete, will supply gas as far as Greece, Albania, and Italy.

Commercial deliveries to Europe are scheduled to start in 2020.

Contact Paula Dittrick at paulad@ogjonline.com.

Copyright © 2018 PennWell Corporation.

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[Qualified Opinion] 1986 exploratory well: adn.com

Qualified Opinion — 1/25/2018 4:36:49 PM

[Qualified Opinion] Reported that BP and Chevron drilled the only exploratory well in ANWR, Alaska i...

Qualified Opinion — 1/25/2018 12:00:46 PM

Reported that BP and Chevron drilled the only exploratory well in ANWR, Alaska in 1984.
Results are confidential.

[Qualified Opinion] Excerpt: Republican Senate: “We have authorised responsible energy development i...

Qualified Opinion — 1/25/2018 11:51:21 AM

Excerpt: Republican Senate: “We have authorised responsible energy development in the 1002 area.” (ANWR, Alaska)

independent.co.uk

[Qualified Opinion] The actual press release: bp.com

Qualified Opinion — 1/16/2018 10:13:09 PM

[Jon Koplik] extra $1.7B cost announced / worth $4.5B in mkt cap loss today

Jon Koplik — 1/16/2018 8:20:41 PM

[Qualified Opinion] Only one big investment bank forecasts Brent crude oil reaching $75 per barrel b...

Qualified Opinion — 1/16/2018 3:26:59 PM

Only one big investment bank forecasts Brent crude oil reaching $75 per barrel by the 3rd qtr. 2018. based on supply and demand.
They're probably not looking at the effect of a lower U.S. dollar.

[Qualified Opinion] Analysts seem to be in denial on the Brent crude oil price and its positive effe...

Qualified Opinion — 1/16/2018 10:51:25 AM

Analysts seem to be in denial on the Brent crude oil price and its positive effect on BP's cash flow and net earnings.
Global demand is very strong for crude oil due to growing economies.
Lower U.S. dollar can help.

[Jon Koplik] Bloomberg -- BP's $60 Billion Gulf Spill Tab Rises as Lawsuits Wind Down ..........

Jon Koplik — 1/16/2018 8:44:14 AM

Bloomberg -- BP's $60 Billion Gulf Spill Tab Rises as Lawsuits Wind Down ..............

January 16, 2018

BP's $60 Billion Gulf Spill Tab Rises as Lawsuits Wind Down

By Amanda Jordan and Kelly Gilblom

BP Plc raised the amount it will pay this year for the Deepwater Horizon accident as thousands of lawsuits related to the biggest oil spill in U.S. history start to wind down.

The 2010 explosion at a well in the Gulf of Mexico threatened BP’s existence after 11 people were killed and millions of barrels of oil spilled into the sea. While the latest liabilities will add to the more than $60 billion of penalties the company has already racked up, Chief Executive Officer Bob Dudley will see an end in sight to the largest court battles.

The London-based company will record a new $1.7 billion charge in the fourth quarter of 2017 and pay $1 billion of that bill in 2018, it said in a statement Tuesday. The remainder will be distributed over a number of years.

“With the claims facility’s work very nearly done, we now have better visibility into the remaining liability,” Chief Financial Officer Brian Gilvary said in the statement. “The charge we are taking as a result is fully manageable within our existing financial framework, especially now that we have the company back into balance at $50 per barrel.”

The latest charge will cover payments to business owners in the area, BP said. The company’s spill-related payouts will rise to $3 billion in 2018 from an earlier estimate of $2 billion, while those for 2017 will remain at $5.5 billion.

The payments have held back BP’s profits in the past. Its shares dropped as much as 2.1 percent in London on Tuesday, the biggest loss in the Stoxx Europe 600 Oil & Gas index.

The British company faced more than 390,000 claims from businesses such as seafood producers and tourism providers following the oil spill. BP says some of them aren’t genuine. More than 99 percent of the cases have been reviewed, according to court documents. Some are being paid out when determined to be valid.

Still, the “last few remaining claims are likely to be the most complex and sizable,” according to Brendan Warn, an analyst at BMO Capital Markets Ltd.

The company agreed to settle all claims with the U.S. federal and state governments in a $21 billion agreement in 2015, removing a major chunk of risks related to the deadly accident and allowing Dudley to grow the company again. BP had at that time agreed to make the payments over about two decades, softening the blow on its balance sheet.

The company has said it will pay for the spill with money raised from asset sales. The higher 2018 payout means it will need to raise its divestment program for the year, according to Oswald Clint, an analyst at Sanford C. Bernstein Ltd.

That’s “fully manageable” within the company’s existing finances, he said. “While truing up the oil-spill charge is a short-term headwind, we don’t see it preventing a solid delivery year for BP.”

Copyright © 2018 BLOOMBERG L.P.

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[Jon Koplik] Oil & Gas Journal -- Two more BP projects begin production .................... ...

Jon Koplik — 8/16/2017 12:51:43 PM

Oil & Gas Journal -- Two more BP projects begin production ....................

August 14, 2017

Two more BP projects begin production

By PennEnergy Editorial Staff

BP has confirmed the start of production from another two of the seven Upstream major oil and gas projects that it expects to come online in 2017. Five of these seven projects have now started up.

Juniper in Trinidad and Persephone in Australia follow the start-ups earlier this year of the first phase of the West Nile Delta development in Egypt, the Trinidad Onshore Compression project and the Quad 204 redevelopment in the UK. A further two projects – the first phase of the Khazzan tight gas development in Oman and development of the Zohr gas field offshore Egypt – are expected to begin production before the end of the year.

Gas production from Juniper began on schedule and under budget. The largest new project to start up in Trinidad for several years and BP’s first subsea field development in Trinidad, Juniper is expected to boost BP Trinidad and Tobago’s (BPTT) gas production capacity by around 590 million standard cubic feet a day (mmscfd). The development produces gas from the Corallita and Lantana fields via the new Juniper platform, 80 kilometres off the south-east coast of Trinidad in water approximately 110 metres deep. Gas then flows to the Mahogany B hub via a new 10km flowline. Juniper is BPTT’s 14th offshore platform in Trinidad.
[Native Advertisement]

The Persephone project off the coast of Western Australia is operated by Woodside Energy and is part of the North West Shelf Project joint venture. The development comprises two subsea wells tied back to the existing North Rankin complex by a 7km flowline. Located about 140km north-west of Karratha, Western Australia in water depth of around 125 metres, at peak production the project is expected to produce around 48 mmscfd of gas net for BP. BP holds a 16.67% interest in Persephone.

Source: BP

Copyright © 2017 PennWell Corporation.

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[Jon Koplik] OGJ -- BP starts production from Thunder Horse South expansion project ............

Jon Koplik — 1/24/2017 9:18:57 PM

OGJ -- BP starts production from Thunder Horse South expansion project ......................

January 23, 2017

BP starts production from Thunder Horse South expansion project

HOUSTON

By OGJ editors

BP PLC has started production from the Thunder Horse South expansion project in the deepwater Gulf of Mexico. It’s expected to boost production at the Thunder Horse facility by an estimated 50,000 boe/d gross.

The project adds a subsea production system roughly 2 miles south of the existing Thunder Horse platform. The system is a collection point for wells connected to the platform by two 11,000-ft flow-lines installed on the seabed in late 2016.

The first new well for the project tapped into the highest amount of hydrocarbon-bearing sand seen to date at Thunder Horse field, with drilling results confirming more than 500 ft of net pay.

The Thunder Horse platform sits in more than 6,000 ft of water and began production in June 2008 ( OGJ Online, Dec. 22, 2008). It has the capacity to handle 250,000 bbl of oil gross and 200 MMcfd gross of natural gas. The facility continued to operate during construction and installation of the new subsea production and pipeline system.

BP last year launched a major water injection project at Thunder Horse field that will allow for the recovery of an additional 65 million boe ( OGJ Online, May 25, 2016).

Thunder Horse is operated by BP with 75% working interest. Partner ExxonMobil Corp. holds the remaining interest.

BP says the Thunder Horse South expansion was completed more than 15% below budget and 11 months ahead of schedule by relying on proven standardized equipment and technology rather than building customized components.

“Thunder Horse South expansion, along with our recent approval of the $9-billion Mad Dog Phase 2 platform, demonstrates that the US Gulf of Mexico remains a key part of our global portfolio today and for many years to come,” said Bob Dudley, BP chief executive officer.

Mad Dog Phase 2’s floating production platform is slated to be built by Samsung Heavy Industries Co. Ltd. ( OGJ Online, Jan. 13, 2017). The project was sanctioned late last year.

In the deepwater gulf, BP operates Thunder Horse, Atlantis, Mad Dog, and Na Kika, and holds interests in non-operated hubs Mars, Olympus, Ursa, and Great White.

Copyright © 2017 PennWell Corp.

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[John Pitera] HI Jon, this deal is quite bullish long term for BPL......The unique agreement s...

John Pitera — 12/20/2016 1:19:56 PM

HI Jon, this deal is quite bullish long term for BPL......

The unique agreement spares BP of paying out cash and gives the capital of the United Arab Emirates' stake in a company that first arrived there in 1939, back when the country was still a British protectorate of sheikhdoms.

The deal also makes the UAE one of the biggest single stockholders in BP as oil prices have climbed out of a 13-year low in February.

"This agreement will provide BP with long-term access to significant and competitive resources that we already understand very well," BP CEO Bob Dudley said in a statement.

News of the deal came without warning Saturday after years of negotiations between London-based BP and Abu Dhabi, the capital of the seven sheikhdoms that form the UAE.

BP had held a 9.5-percent interest in the onshore concession that expired in late 2014. That year, the company's overall crude production dropped 2.4 percent, something it blamed in part on losing the Abu Dhabi concession.

BP said Saturday's deal includes the UAE's Bab, Bu Hasa, Shah and Asab fields, which will produce between 20 billion to 30 billion barrels of oil equivalent over the 40-year term of the concession. BP will be entitled to 10 percent of its anticipated production of 1.66 million barrels of oil per day under the deal.

The 10 year British Petroleum chart has a number of bullish developments as it nudges up to a multiyear horizontal resistance area that it appears to be preparing to break out above. Especially bullish is the Accumulation/Distribution line, The very powerful price momentum on the Oscilators and The RSI MA model is in buy mode and the Money Flow is also in buy mode.

Positive fundamental catalysts such as this deal can only help.

JP

[Jon Koplik] OGJ / AP News on : BP signs onshore oil deal with Abu Dhabi worth $2.22 billion ...

Jon Koplik — 12/20/2016 10:58:54 AM

OGJ / AP News on : BP signs onshore oil deal with Abu Dhabi worth $2.22 billion ................

December 19, 2016

BP signs onshore oil deal with Abu Dhabi worth $2.22 billion

By Jon Gambrell, Associated Press

DUBAI, United Arab Emirates (AP) -- BP PLC signed a $2.22-billion deal Saturday restoring its share of an onshore oil block in Abu Dhabi by agreeing to give the emirate stock in the company worth 2 percent of the oil giant's overall value.

The unique agreement spares BP of paying out cash and gives the capital of the United Arab Emirates' stake in a company that first arrived there in 1939, back when the country was still a British protectorate of sheikhdoms.

The deal also makes the UAE one of the biggest single stockholders in BP as oil prices have climbed out of a 13-year low in February.

"This agreement will provide BP with long-term access to significant and competitive resources that we already understand very well," BP CEO Bob Dudley said in a statement.

News of the deal came without warning Saturday after years of negotiations between London-based BP and Abu Dhabi, the capital of the seven sheikhdoms that form the UAE.

BP had held a 9.5-percent interest in the onshore concession that expired in late 2014. That year, the company's overall crude production dropped 2.4 percent, something it blamed in part on losing the Abu Dhabi concession.

BP said Saturday's deal includes the UAE's Bab, Bu Hasa, Shah and Asab fields, which will produce between 20 billion to 30 billion barrels of oil equivalent over the 40-year term of the concession. BP will be entitled to 10 percent of its anticipated production of 1.66 million barrels of oil per day under the deal.

BP also operates in separate, offshore Abu Dhabi oil concessions.

Sultan Ahmed al-Jaber, director of the state-run Abu Dhabi National Oil Co. and Emirati Minister of State, said in statement that BP "has long been a strategic partner to Abu Dhabi."

"This agreement marks a milestone in our efforts to forge new partnership models that bring technology, expertise and financing aimed at maximizing the value of our resources and supporting the transfer of knowledge," al-Jaber said.

But those negotiations apparently were fierce and took time. France's Total SA earlier reportedly agreed to pay $2.2 billion for a 10-percent concession for 40 years and $2.85 for every barrel of oil sold.

Japan's INPEX Corp. holds a 5-percent stake while GS Energy of South Korea holds 3 percent in the onshore concession operated by the Abu Dhabi Company for Onshore Petroleum Operations, also known as ADCO.

BP said Saturday that Abu Dhabi continues to look for foreign partners to take on a remaining 12-percent stake.

The UAE's state-run WAM news agency put the stock deal's value at $2.22 billion. BP declined to offer a specific figure.

The agreement will catapult Abu Dhabi into the top tier of BP stockholders, putting it ahead of Kuwait and Norway's sovereign wealth funds, which each hold over 1.7 percent of the company.

The deal comes as oil prices, which fell from highs of over $100 a barrel in mid-2014 to $30 this year, have clawed their way back to $50.

Part of that is due to OPEC members, including the UAE, agreeing to pare 1.2 million barrels a day of their production, while nonmembers pledged an addition daily 558,000-barrel cut. It's the first joint production cut in 15 years.

Copyright © 2016 PennWell Corporation.

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[Jon Koplik] WSJ -- BP Strikes $2.2 Billion Deal for 10% Stake in UAE Oil Fields ...............

Jon Koplik — 12/18/2016 12:09:42 AM

WSJ -- BP Strikes $2.2 Billion Deal for 10% Stake in UAE Oil Fields ........................................

Dec. 17, 2016
7:24 a.m. ET

BP Strikes $2.2 Billion Deal for 10% Stake in UAE Oil Fields

The all share deal ends the drawn out negotiation process between the oil company and Abu Dhabi

By Sarah Kent

LONDON -- BP has traded a 2% stake in the company for a 10% interest in one of the last big oil concessions available in the Middle East, the company said Saturday, ending a years-long standoff over the terms to gain access to the license in the United Arab Emirates.

The all share deal, worth roughly £1.8 billion ($2.2 billion), gives BP access to onshore oil fields containing 20-30 billion barrels of oil equivalent over the 40-year term of the contract. It will provide BP with 165,000 barrels of oil equivalent a day as well as longer-term and low-cost growth prospects.

The deal comes as oil prices begin to show signs of recovering after a two-year slump, boosted by an agreement between major producers -- including the U. A. E. -- to cut back output.

The agreement between the U.A.E. and BP is the latest success for Abu Dhabi in a drawn-out negotiation process between the Emirate and international oil companies for concession rights. Talks have intermittently stalled for years over the terms demanded by the Gulf state.

Total SA set the benchmark for a deal last year, after the French oil major agreed to a $2.2 billion sign-on fee in return for a 10% in the concession and $2.85 for every barrel of oil sold. At the time, voices from within the industry didn’t see the deal as being favorable, particularly as low prices intensified companies’ scrutiny of deal values. BP and Royal Dutch Shell PLC hesitated to complete similar deals.

Since then, Japan’s INPEX Corp. and GS Energy of South Korea have also taken smaller stakes in the concession.

BP is likely to have received a similar per barrel fee to Total for its interest in the oil field, though the company did not disclose details. It will become a 10% shareholder in the Abu Dhabi Company for Onshore Petroleum Operations Limited, or Adco, which operates the concession.

Write to Sarah Kent at sarah.kent@wsj.com

Copyright © 2016 Dow Jones & Company, Inc.

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[Jon Koplik] Oil & Gas Journal piece : BP, Chinese companies reach LNG, shale gas pacts ........

Jon Koplik — 10/22/2015 3:15:09 PM

Oil & Gas Journal piece : BP, Chinese companies reach LNG, shale gas pacts ...........

10/21/2015

BP, Chinese companies reach separate LNG, shale gas pacts

HOUSTON
By OGJ editors

BP PLC and two Chinese companies signed agreements on Oct. 21 respectively relating to natural gas exploration and supply as part of Chinese President Xi Jinping’s visit to the UK.

BP and China National Petroleum Corp. (CNPC) entered into a framework agreement on strategic cooperation covering potential shale gas exploration and production in the Sichuan basin, and future fuel retailing ventures in China along with other international partnerships.

The deal is expected to add several billion dollars in future trade to BP’s business with China, the company says.

“The success of our Rumaila oil field project in Iraq has convinced us that there are more opportunities for cooperation between CNPC and BP,” explained Bob Dudley, BP Group chief executive.

Rumaila is one of the world’s largest oil fields, currently producing 1.3 million bo/d. In June 2009, BP and CNPC were the sole winners in Iraq’s first post-war licensing round.

The companies are one half of the Rumaila Operating Organization, which plans to increase production by 50% from Rumaila to 2.1 million b/d by the end of the decade (OGJ Online, Dec. 17, 2014).

“We expect China’s energy production to rise 47% and its consumption to grow 60% by 2035, making it the world’s largest energy importer,” said Edward Yang, BP China president.

CNPC Chairman Wang Yilin said, “CNPC and BP have enjoyed a longstanding, cooperative relationship involving projects both in and outside of China. This framework agreement on strategic cooperation will further facilitate our two companies’ joint efforts in exploring opportunities on a global scale, be conducive to enhancing cooperation, and take our strategic partnership to a new height.”

LNG supply deal

Separately, BP and China Huadian Corp. signed an agreement for BP to sell Huadian as much as 1 million tonnes/year of LNG worth about $10 billion over the next 20 years.

Huadian is one of the five largest state-owned electric power generation companies in China and the country’s largest gas-fired power generator, BP says.

“This marks another long-term LNG supply deal between BP and Chinese buyers and it will play an important role in enhancing China’s energy diversification and supporting its economic growth,” said Dudley. “Not only does it strengthen China’s connections to BP and the UK as global trading partners, it also supports China’s commitment to improving its air quality and reducing its emissions through the use of lower carbon fuels.

“This agreement also strengthens the connectivity of global gas markets, which is important for countries seeking more diverse and secure energy supplies,” he said.

Huadian Chairman Li Qingkui said, “This agreement is not only in line with the common objectives of our companies, but it also matches the energy policies of China and the UK.”

BP has been operating in China since the early 1970s, and has an accumulated investment of current operations about $4.5 billion.

BP’s business activities in China include petrochemicals manufacturing and marketing, aviation fuel supply, oil product and lubricant retailing, LNG terminal and pipelines, and chemical technology licensing.

Copyright © 2015 PennWell Corp.

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