BP’s CEO has declared that the company can sustain production of at least 4 million barrels a day until 2020 even with no new discoveries or access to new opportunities. Added to that, thanks to successful reserve replacement last year, it has extended the life of its current production to 43 years, up from 41 in 2006.
BP replaced its annual production by 112% in 2007, taking its proved reserves of oil and gas to 17.8 billion barrels. It also added some 2.4 billion new barrels to its non-proved resource base, which now stands at a further 42.1 billion barrels of oil equivalent.
“The strength of this position – reinforced by recent access to new opportunities in Oman, Libya and Colombia, along with heavy oil in Canada – supports production potential of around 4.3 million barrels a day by 2012,” said BP chief executive Tony Hayward.
At the company’s annual strategy presentation Hayward said that in a $60 price world BP was confident not only of boosting output over the next four years but of being able to sustain production of at least 4 million barrels a day until 2020 even with no new discoveries or access to new opportunities.
“However, bearing in mind a rise in exploration spend to nearly $1 billion this year together with significant additions of fresh acreage in established areas such as the deepwater Gulf of Mexico and a continuing drive to access new provinces around the world, we expect to do better than this,” a buoyant Hayward said.
Exploration and production chief executive Andy Inglis said BP had found a major new reservoir below the Shah Deniz field in Azerbaijan, one of the largest discoveries in the world last year. Other big finds were made in Egypt, Angola and the Gulf of Mexico.
The company added 2.4 billion barrels to resources in 2007, boosting the resource base to 42.1 billion barrels. This combined with year-end reserves of 17.8 billion barrels, took resources plus reserves to 60 billion barrels, extending the life of BP’s production from 41 to 43 years at current rates.
Inglis estimated 2008 upstream spend at $15 billion, or $17.5 billion including BP’s share of spending by TNK-BP and Pan American. This included a 50% rise in funding for research and development – in part to advance ten major technology projects, each with the potential to add 1 billion barrels of oil equivalent to reserves. He said BP expected to bring more than 25 new projects on stream between 2007 and 2009, and progress a further 30.
TNK-BP chief executive Robert Dudley said the Russian company had invested some $3.5 billion last year, excluding acquisitions. “In 2008, we expect this to rise to around $4 billion as investments in major projects and downstream increase.
TNK-BP now has over $15 billion of new major projects in various stages and we expect to see a production contribution from these post-2009. Therefore, in 2012 we expect production to be around 1.9 million barrels a day.”
In conclusion, Tony Hayward said the company made significant progress at BP over the past ten months. “Quietly and without fuss, we have established sound, practical objectives and are now beginning to deliver them.”
