BP's $36 Billion in Projects Include Top-Valued Production, Refining Start-Ups in 2018

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Researched by Industrial Info Resources (Sugar Land, Texas)--BP plc (NYSE:BP) (London, England) can count itself among the oil and gas leaders to see sharp improvement so far in 2018, buoyed by stronger commodity prices and rising production. And the company has plenty to look forward to, with a slew of major production and refining projects set to come on line this year. Industrial Info is tracking $36.5 billion in active BP projects globally, about 33% of which are under construction.

Click on the image at right for a graph detailing the top 10 countries for active BP projects, by investment value.

First-quarter production totaled 3.7 million barrels of oil equivalent per day, up 6% from the same period last year. BP's production in the U.S. Lower 48 totaled 316 million barrels of oil equivalent per day, which was about 12% higher than in the same period last year. BP reported first-quarter profits of $2.6 billion, compared with $1.5 billion for the same period in 2017.

BP expects organic capital expenditures in 2018 to range from $15 billion to $16 billion. Upstream underlying production is expected to be higher than in 2017, driven by this year's project start-ups and the continued ramp-up of major projects in 2017.

Among the top-valued upstream projects BP expects to complete this year are the $3.5 billion crude oil and natural gas production platform in the Clair Ridge Field of the North Sea, with which BP is targeting 640 million barrels of recoverable resources, and the Shah Deniz II development in the Caspian Sea, offshore Azerbaijan, which targets an estimated 30 trillion to 40 trillion cubic feet of natural gas reserves.

The Clair Ridge project will include two bridge-linked platforms--one for drilling and production, another for quarters and utilities. includes $1.5 billion in jackets, $1.25 billion in accommodation quarters and $900 million in topsides for the drilling platform, which is expected to have an annual production capacity of 24 billion cubic meters of natural gas and 150,000 barrels of gas condensates. For more information, see Industrial Info's reports on the Clair Ridge project and the Shah Ridge jackets, accommodation quarters and topsides.

In the Gulf of Mexico, BP expects to finish construction later this year on the $50 million tension leg addition at the SP-89-E Platform, to handle up to 100,000 BBL/d in additional volumes of crude oil from Royal Dutch Shell plc's (NYSE:RDS.A) (The Hague, Netherlands) Appomattox platform, also under construction. For more information, see Industrial Info's project report.

While BP executives acknowledged North American refining margins were "relatively suppressed in the first quarter compared to a year ago," they heralded success at the Whiting Refinery in Whiting, Indiana, BP's largest refinery globally and the largest in the U.S. Midwest. "At our Whiting refinery, we processed over 10% more heavy crude than a year ago, partially capturing the higher light-heavy discounts," said Brian Gilvary, the chief financial officer of BP, in an earnings-related conference call.

BP is at work on a $360 million naphtha hydrotreater unit addition at Whiting, which is expected to have an 85,000-BBL/d capacity and finish construction next spring. The addition will reduce sulfur content in gasoline from 30 to 10 parts per million (ppm) to meet Tier 3 regulations. BP also is planning a $10 million FCCU 600 upgrade, which would enhance the 65,000-BBL/d fluid catalytic cracking unit (FCCU) by modifying the main fractionation column and replacing the reactor and regenerator internals. For more information, see Industrial Info's reports on the naphtha hydrotreater and FCCU 600 projects.

BP also has a pair of projects under construction at its Cherry Point Refinery in Blaine, Washington: a $10 million delayed coker unit upgrade and a $6 million crude and vacuum unit upgrade. Both are expected to wrap up around early June and improve reliability at the 55,000-BBL/d delayed coker, 234,000-BBL/d crude unit and 90,000-BBL/d vacuum unit. For more information, see Industrial Info's reports on the delayed coker, and crude and vacuum units.

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