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Is BP Ready for Lower Oil Prices?

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Part 3
Is BP Ready for Lower Oil Prices? PART 3 OF 17

Inside BP’s Upstream Portfolio: Where the Growth Projects Stand Today

BP’s upstream projects

BP’s (BP) upstream production is poised to grow in 2017, with a series of projects coming online this year. In 1H17, around three major upstream projects came online: the West Nile Delta (Taurus and Libra fields), the Trinidad Onshore Compression, and the Quad 204.

Meanwhile, Persephone in Australia and Juniper in Trinidad are in their commissioning phases, and mega projects Khazzan Phase 1 in Oman and Zohr in Egypt are on track to achieve startup in 2017.

Inside BP’s Upstream Portfolio: Where the Growth Projects Stand Today

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The above projects are key projects expected to provide enormous hydrocarbon growth for BP. The West Nile Delta in Egypt could produce gross ~105 Mboepd at its peak production level, and it has started ahead of time and is already above the expected capacity. The Quad 204 in the North Sea could ramp up to ~125 Mboepd in gross peak production.

Persephone and Juniper could produce ~50 Moped and ~95 Moped at peak level, but mega projects like Khazzan and Zohr could ramp up to ~200 Mboepd and whopping ~440 Mboepd, respectively, in gross peak production.

Hydrocarbon production

With all these projects coming online in 2017, BP is expected to see a rise in its hydrocarbon production. This production is expected to grow steeply next year, and BP expects around 800 Mboepd (thousand barrels of oil equivalent per day) of new production, net to BP, by 2020.

In its 2Q17 earnings presentation and script, BP Group CEO (chief executive officer) Bob Dudley stated, “We have a strong portfolio that we continue to optimize and test against our hurdle rates. And that gives us a lot of options, with only the best and most competitive…within the discipline of our capital frame.”

BP’s discoveries

So far this year, BP has also had four gas discoveries. These include the Savannah and Macadamia in Trinidad, the Qattameya in Egypt, and the Yakaar-1 exploration well in Senegal.

The discoveries in Trinidad are expected to hold around 2 trillion cubic feet of gas in place. The discovery in Egypt was in North Damietta Offshore concession. BP is developing the Atoll field in that concession.

BP’s proved reserves

BP also has large proved reserves of 17.8 Bboe (billion barrels of oil equivalent), which are expected to drive growth beyond 2020. BP’s upstream holdings, with its vast reserve base and new project startups, are likely to become more profitable if oil prices rise.

By comparison, Chevron (CVX), Royal Dutch Shell (RDS.A), and ExxonMobil (XOM) have proved reserves of around 11.1 Bboe, 13.3 Bboe, and 19.8 Bboe, respectively.

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