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Released August 02, 2017 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Oil prices may be low, but BP plc (NYSE:BP) (London, England) is the latest giant to prove that it can change with the times, preparing to launch its largest number of oil and gas projects for a single year in 2017. Although the company saw its profits dip in the second quarter, most of the decline was attributed to impairment charges for a single offshore project, and new projects point to new avenues for growth. Industrial Info is tracking more than $36 billion in active projects involving BP, including the major launches.
Oil and gas production is expected to be mostly flat in the third quarter when compared with the same period last year. But BP's project start-ups for 2017 already have helped production reach 2.43 million barrels of oil equivalent per day, a 9.9% increase from the first half of 2016.
Earlier this year, BP began production at one of its largest projects in years: the Quad 204 oilfield in the North Sea, as part of a $5.7 billion redevelopment. Construction is underway on the $130 million second phase of the Schiehallion Oil & Natural Gas Offshore Field Redevelopment Project in Quad 204, in which 12 more wells are expected to be drilled to explore an area with an estimated 600 million barrels of recoverable oil. BP also is planning a $135 million third phase for Schiehallon, which would add another 12 or 13 wells. For more information, see Industrial Info's reports on Phase II and Phase III of the Schiehallion project.
BP noted in a June press release that it recently was granted 25 blocks in the UK's 29th Offshore Licensing Round, representing its "largest acreage award in the North Sea since the late 1990s." Since late last year, BP has added acreage and has been awarded exploration licenses in Canada, Mexico and Senegal.
Quad 204 is joined by other major BP projects set to start up in 2017:
Unlike other exploration and production companies, BP did not announce a significant reduction in its capital spending outlook for the remainder of the year. Chief Financial Officer Brian Gilvary told Reuters that BP's 2017 capital spending was expected to be about $16 billion, in the middle of the $15 billion to $17 billion forecast range.
"The lower end represents the ready flexibility we have to tighten capital expenditure during periods of lower oil prices, without materially impacting our growth objectives," Gilvary said in a quarterly earnings conference call. "So we would expect our capital expenditure for 2018 to be at the low end of the range should oil prices remain around $50 per barrel."
Net income for the quarter was reported to be $684 million, a 5% decrease from second-quarter 2016. Much of the decline was attributed to a $750 million impairment charge related to BP's failed attempts to drill offshore Angola. The company gave up on its 50% stake in an unproductive block off Angola's coast, resulting in the write-down. Industrial Info is tracking nearly $25 million in maintenance-related projects for related assets.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Oil and gas production is expected to be mostly flat in the third quarter when compared with the same period last year. But BP's project start-ups for 2017 already have helped production reach 2.43 million barrels of oil equivalent per day, a 9.9% increase from the first half of 2016.
Earlier this year, BP began production at one of its largest projects in years: the Quad 204 oilfield in the North Sea, as part of a $5.7 billion redevelopment. Construction is underway on the $130 million second phase of the Schiehallion Oil & Natural Gas Offshore Field Redevelopment Project in Quad 204, in which 12 more wells are expected to be drilled to explore an area with an estimated 600 million barrels of recoverable oil. BP also is planning a $135 million third phase for Schiehallon, which would add another 12 or 13 wells. For more information, see Industrial Info's reports on Phase II and Phase III of the Schiehallion project.
BP noted in a June press release that it recently was granted 25 blocks in the UK's 29th Offshore Licensing Round, representing its "largest acreage award in the North Sea since the late 1990s." Since late last year, BP has added acreage and has been awarded exploration licenses in Canada, Mexico and Senegal.
Quad 204 is joined by other major BP projects set to start up in 2017:
- Taurus and Libra gas fields in the West Nile development offshore Egypt, which will include a $52 million natural gas pipeline that will carry 20 million standard cubic feet per day from the fields to an onshore natural gas processing plant. For more information, see Industrial Info's project report.
- Juniper subsea field development offshore Trinidad and Tobago, which will include a $1 billion unmanned platform that will produce up to 590 million standard cubic feet per day of natural gas and a $300 million pipeline to transport 100 million standard cubic feet per day an existing platform. For more information, see Industrial Info's project reports on the platform and pipeline.
- Persephone development in the North West Shelf Project offshore Australia (in which BP has a 16.67% stake), which will feature a $963.5 million gas field buildout with a pair of subsea tie-backs to the existing North Rankin production platform. For more information, see Industrial Info's project report.
- Khazzan development offshore Oman, which will include a $1.5 billion, onshore natural gas processing plant, which will process 1.5 billion cubic feet per day via two trains; a $120 million gas field development project, which will add 20 wells in the area; and a $150 million pipeline, which will connect the plant to 330 wells in the gas fields. For more information, see Industrial Info's project reports on the processing plant, gas field and pipeline.
- Zohr development offshore Egypt (in which BP has a 10% stake), which will include a $600 million gas field development that will drill six wells to produce 1.4 billion standard cubic feet per day; the $200 million first phase of an onshore processing plant; and a $400 million natural gas pipeline and a $300 million monoethylene glycol pipeline, both connecting the field to the processing plant. For more information, see Industrial Info's project reports on the gas field, processing plant, gas pipeline and monoethylene glycol pipeline.
Unlike other exploration and production companies, BP did not announce a significant reduction in its capital spending outlook for the remainder of the year. Chief Financial Officer Brian Gilvary told Reuters that BP's 2017 capital spending was expected to be about $16 billion, in the middle of the $15 billion to $17 billion forecast range.
"The lower end represents the ready flexibility we have to tighten capital expenditure during periods of lower oil prices, without materially impacting our growth objectives," Gilvary said in a quarterly earnings conference call. "So we would expect our capital expenditure for 2018 to be at the low end of the range should oil prices remain around $50 per barrel."
Net income for the quarter was reported to be $684 million, a 5% decrease from second-quarter 2016. Much of the decline was attributed to a $750 million impairment charge related to BP's failed attempts to drill offshore Angola. The company gave up on its 50% stake in an unproductive block off Angola's coast, resulting in the write-down. Industrial Info is tracking nearly $25 million in maintenance-related projects for related assets.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
