London +4420 814 42225
Moscow +7495 543 9194
Kiev +38044 599 2950
info@mrcplast.com

Our Clients

Order Informer

 
Home > News >
 

BP committed to strong US shale assets despite shift to green investment

August 28/2020

MOSCOW (MRC) -- BP remains committed to its fast-growing US onshore shale business despite ambitious targets to slash its dependence on carbon-intensive oil and gas over the next decade, reported S&P Global with reference to the company CFO Murray Auchincloss' statement earlier this month.

The investment rationale for BP's US shale oil and gas assets "remains strong," with expected cost savings set to boost earnings from the business, Auchincloss told analysts on a strategy presentation.

BP has been increasing activity and optimizing operations at its US shale acreage purchased from mining giant BHP in 2018 for USD10.3 billion.

Oil production from the US shale business, known as BPX, has tripled to 127,000 b/d after the purchase of BHP's assets mostly in the Eagle Ford and Permian shale basins.

"The reservoirs are better than we thought," Auchincloss said, "We're finding more zones than we thought originally...and obviously, the capital is deflating these days, service rates are down so when we start drilling again, service rates are going to be an awful lot lower."

Auchincloss said BP also expects to find additional cost savings to the targeted USD400 million in synergies at the time of the acquisition.

BP has said spending curbs during 2020 due to the pandemic will reduce its production by 70,000 b/d of oil equivalent this year, with most of the reduction to occur at the company's BPX shale business.

BP said earlier it expects to see its upstream global production fall by at least 40% by 2030 as it spends less on exploration and development and sells off some producing assets.

During the second quarter of 2020, BPX's total production slipped to 364,000 boe/d, down from 499,000 boe/d in the year-ago period reflecting a 26% fall in its shale gas production as drilling almost halted amid the coronavirus pandemic.

Earlier this year, as MRC wrote previously, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

And in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.


mrcplast.com
Author:Margaret Volkova
Tags:Europe, PP, PE, crude and gaz condensate, homopolymer PP, propylene, HDPE, ethylene, petrochemistry, BASF, Borealis, BP Plc, LyondellBasell, Sabic, Total Petrochemicals, Russia, USA.
Category:General News
|
| More

Leave a comment

MRC help

 


 All News   News subscribe