BP makes its biggest oil and natural gas discovery in 25 years as it refocuses on fossil fuels
BP (BP) is seeking to bolster oil and gas in its portfolio to regain investor confidence and revive underperforming shares.
It said it planned to create a major new output hub at the Bumerangue discovery in Brazil, which a BP spokesperson said was probably the company's biggest since Shah Deniz in 1999, a gas and condensate field in the Azeri part of the Caspian Sea.
Shah Deniz, with around 1 trillion cubic meters of gas and 2 billion barrels of condensate initially in place, produced 28 billion standard cubic meters of gas last year, according to BP.
It gave no reserve estimate for the Brazilian block.
'Brazil is an important country for BP, and our ambition is to explore the potential of establishing a material and advantaged production hub in the country,' said Gordon Birrell, BP's production and operations chief.
BP shares gained 1.3% by 7:07 a.m. ET, outperforming a broader index of European energy companies, which was up 0.1%.
'Although we cannot extrapolate as it is too early, and each well and each reservoir is different, we believe the data… provides support that the potential scale for this 100% BP discovery could be a game-changer,' Bernstein analyst Irene Himona said in a note.
BP, which forecast its oil and gas production at 2.3 million to 2.5 million barrels of oil equivalent per day by 2030, said this was its 10th discovery this year, following findings in Trinidad, Egypt, Brazil and others.
Production in 2024 was 2.4 million barrels of oil equivalent. BP expects production to be lower in 2025.
BP had secured the Bumerangue block in the Santos basin amid pre-salt rocks in deep water off the coast of Brazil in December 2022 with what it said were 'very good commercial terms.'
Early results indicate elevated levels of carbon dioxide in the Brazilian block, BP said, adding that further analysis would give more insight into its potential amid a bigger drilling program in Brazil.
BP is set to report its second-quarter results Tuesday.
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