BP makes its biggest oil and gas discovery in 25 years

Yahoo

2 days ago

BP has hailed its biggest oil and gas discovery in over a quarter of a century as the oil giant renews its focus on fossil fuels.
The FTSE 100 group revealed the find after drilling a well off the coast of Brazil, in the Bumerangue oil field, just over 400 kilometres offshore from Rio de Janeiro, spanning more than 300 square kilometres.
It said the discovery was its tenth to date in 2025 and estimated to be its largest since the discovery of Shah Deniz gas field in the Caspian Sea in 1999.
Gordon Birrell, BP's executive vice president for production and operations said: 'We are excited to announce this significant discovery at Bumerangue, BP's largest in 25 years.
'This is another success in what has been an exceptional year so far for our exploration team, underscoring our commitment to growing our upstream.
'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.'
Shares in the group lifted around 1.5% higher in Monday trading after the announcement.
It comes ahead of half-year results on Tuesday, which are expected to show a big fall in BP's second quarter earnings.
BP – like its rival Shell and other peers – has shifted away from net zero ambitions to focus on extracting more oil and gas, following pressure from some investors to boost its profits.
Activist investor Elliott Management has taken a 5% stake in BP and is reportedly also putting pressure on the energy giant to cut costs.
BP recently said that quarterly earnings would be weighed down by lower oil and gas prices.
But last month it raised its oil and gas production guidance for the second quarter, compared with the previous three months.
However, the oil business said lower prices received for its oil production were expected to impact results by up to 800 million dollars (£602 million).
Victoria Scholar, head of investment at interactive investor, said cost cutting efforts and shareholder returns will be in sharp focus when BP reports on Tuesday.
It is expected to deliver 1.8 billion dollars (£1.4 billion) in underlying replacement cost profits for the second quarter, according to Ms Scholar.
This will be higher than the 1.38 billion dollars (£1.04 billion) reported for the first quarter, which was a 49% year-on-year slump due largely to weaker oil prices.
But it would mark big drop from the 2.8 billion dollars (£2.1 billion) reported in the second quarter of last year.
Ms Scholar said: 'Weaker refining margins and lower volumes have been a mainstay of performance over recent quarters.
'The weakening macroeconomic backdrop and OPEC+'s strategy shift towards boosting production are expected to keep a lid on oil prices and are key headwinds for BP.'
She added: 'Oil trading will also be in focus for BP after rival Shell reported a disappointing trading performance in the quarter – it struggled to deal with the speculative market volatility over the period.
'All eyes will be on any changes to cash returns for shareholders after BP lowered its share buyback in April.'
Shares in BP are down by nearly 7% over the past year.
The stock has also been buffeted by reports that Shell was exploring a possible offer to buy BP, only for the speculation to be quashed in June – with Shell telling investors that no talks had taken place and it had 'no intention' of putting forward a bid.