A Status Update of BP’s Key Upstream Projects
BP’s key upstream projects
BP (BP) expected seven of its key projects to start production in 2017. In 1H17, three key upstream projects began operations: Trinidad Onshore Compression, West Nile Delta (the Taurus and Libra fields), and Quad 204. Also, the Persephone project in Australia and the Juniper project in Trinidad were commissioned in August 2017.
In September, mega project Khazzan Phase 1 has started production in Oman. Plus, Zohr in Egypt is expected to start production in December.
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These projects have been completed according to their respective schedules. The West Nile Delta project in Egypt started ahead of time and above the expected capacity. The Trinidad Onshore Compression, which focused on increasing production from low-pressure wells, started well within budget.
Quad 204 started production during the year, marking the installation of the largest harsh-water FPSO. Juniper, which is expected to boost BP Trinidad and Tobago’s gas production capacity, started production according to the expected schedule. Persephone, located in offshore Western Australia, is expected to produce gas at a water depth of ~125 meters.
Khazzan Phase 1 began on time and under budget. When it began operations, BP’s group chief executive, Bob Dudley, stated, “Khazzan further demonstrates BP’s ability to consistently deliver large, complex projects on schedule and within budget while applying the industry-leading skills and technology we’ve developed globally.”
The projects, which started operating during the year, would add to BP’s overall hydrocarbon production. However, its production is expected to grow in 2018 as these projects ramp up. BP expects ~800 Mboepd (thousand barrels of oil equivalent per day) of new production, net to BP, by 2020 from its major upstream projects. The seven key projects discussed above should contribute a significant portion of the stated new production.
BP’s proved reserves
Plus, BP has large proved reserves of 17.8 Bboe (billion barrels of oil equivalent), which is presumed to drive growth beyond 2020. BP’s Upstream segment, with its vast reserve base, would contribute significantly to its overall earnings even after 2020.
In the next part, we’ll review BP’s outlook for its 3Q17 Upstream earnings.