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Natural gas

BP Makes Largest Oil and Gas Discovery in 25 Years in Brazil

Strategic Insights

— 2 min read

BP has made its biggest oil and gas discovery in 25 years off the coast of Brazil, the company's 10th discovery of the year and a significant boost to its plans to increase oil and gas production. This latest find, in the Santos basin, is located in deep waters about 400km off the Brazilian coast and has the potential to play a significant role in the company's goal to reach between 2.3m to 2.5m barrels of oil equivalent a day. The discovery follows a shift in BP's focus back to fossil fuels, abandoning its previous plan to cut hydrocarbon production and expand into low-carbon energy alternatives.

Key Takeaways:

  • BP's Santos basin oil and gas discovery is its largest in 25 years, made beneath about 2,400 meters of water, and could be its biggest since the Shah Deniz gas field discovery in Azerbaijan in 1999.
  • The company is carrying out further tests to gauge the potential of the oil and gas basin, which is likely to play a significant role in its plan to increase oil and gas production to between 2.3m to 2.5m barrels of oil equivalent a day.
  • BP is exploring the potential of establishing a "material and advantaged production hub" in Brazil, following the second discovery in the country this year.
  • The company's return to fossil fuels is driven by unforeseen hurdles with its "net zero" energy plan, including a $25bn hit after offloading its stake in the Russian oil company Roseneft following the Kremlin's invasion of Ukraine.
  • BP's share price has declined, raising concerns that it could become prey for a larger rival, with Shell denying reported interest in buying the company and activist investor Elliott Management amassing a 5% stake in the company.
  • Energy producers agreed to boost output by 547,000 barrels per day for September, reversing cuts made during the Covid-19 pandemic.

Statistics:

  • BP's Santos basin oil and gas discovery is its 10th discovery of the year.
  • The company plans to increase oil and gas production to between 2.3m to 2.5m barrels of oil equivalent a day.
  • The discovery is located in deep waters about 400km off the Brazilian coast.
  • BP's share price declined, with the company facing concerns of a possible takeover.
  • Energy producers agreed to increase output by 547,000 barrels per day for September.

Sources:

  • BP Press Release
  • Bloomberg
  • The Guardian
  • Shell Press Release
  • The Times of Israel
  • OPEC+ Press Release
  • Energy Secretary, Brett Gillette

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