Malcolm Moore in London – Updated 09:40
Find at 300 sq km Bumerangue field is a potential major boost as company refocuses on fossil fuels
BP has made its biggest oil and gas discovery in 25 years after drilling a successful well in a field off the coast of Brazil, in a boost to the energy giant as it refocuses on fossil fuels.
The Bumerangue field lies in the Santos Basin, about 400km from Rio de Janeiro, and spans more than 300 sq km, an area roughly five times the size of Manhattan.
Gordon Birrell, BP’s head of oil production, said the “significant discovery” was the company’s largest in 25 years, in a stock exchange statement on Monday. BP shares rose 1.2 per cent in early trading, outstripping rival Shell, which fell 0.4 per cent.
The find was the company’s biggest since the 1999 discovery of Shah Deniz, a giant gasfield in the Caspian Sea that holds about 35tn cubic feet of gas, according to a BP spokesperson.
Bumerangue is believed to contain a mix of gas, condensate and oil, but BP said it was too early to assess the size or quality of the reserves. It noted that elevated levels of carbon dioxide had been detected, a factor that could complicate extraction and increase processing costs and affect the economic viability of the project. Bringing a deepwater field in Brazil to production can take between four to 10 years.
The find comes as BP chief executive Murray Auchincloss shifts its strategy to place greater emphasis on oil and gas, and less emphasis on renewables. In February, Auchincloss said BP would invest $10bn a year, or 20 per cent more than previously planned, on oil and gas in order to step up exploration and increase production.
The company holds 100 per cent of the licensing rights for the field, having been the sole bidder in a 2022 auction. The terms are commercially favourable; BP will pay 5.9 per cent of the profits to the Brazilian government after recovering its costs.
Bumerangue is BP’s 10th discovery this year, following successful wells in Trinidad, Egypt, Libya, Brazil and the Gulf of Mexico. Azule, BP’s joint venture with Italian oil major Eni, has also made discoveries in Namibia and Angola.
In February, the company reversed a previous pledge to limit exploration outside its existing basins and scale back its fossil fuel output as part of a transition to clean energy.
Last year, BP produced just under 2.4mn barrels of oil and gas per day. It now aims to maintain production between 2.3mn and 2.5mn barrels per day by 2030, with potential for further increases by 2035.
Source: Financial Times / Br8
