BP’s progress in 2014

As part of BP’s first quarter results, the company announced a strategic progress update related to its exploration, upstream and downstream global activities.

Exploration

Eight exploration wells have been completed so far in 2014, including the Cobalt-operated Orca discovery in Angola and the BG-operated Notus discovery in Egypt, and BP is on track to participate in at least 15 exploration wells over the full year. In the quarter, following the lifting of BP’s suspension and debarment by the US EPA, BP was the highest bidder on 24 new leases in the Gulf of Mexico, with final awards subject to regulatory approval.

Upstream

Three new major upstream projects started production during the first quarter – Chirag Oil in Azerbaijan, Na Kika Phase 3 and the Shell-operated Mars B in the Gulf of Mexico. Production has also since begun from the Atlantis North Expansion Phase 2 development in the Gulf of Mexico and three further projects continue to make progress towards start up in 2014.

Downstream

In the Downstream sector, refining availability was maintained at 95% or above for the seventh consecutive quarter. Heavy crude processing at the upgraded Whiting refinery continues to ramp-up; the refinery was processing around 200 000 bpd of heavy oil at the end of the first quarter and is expected to reach up to 280 000 bpd during the second quarter.

BP portfolio

Active management of BP’s portfolio also continues with the agreement to focus BP’s activities in Alaska, divesting interests in four fields to Hilcorp, and BP’s plans to form a separate business to run its US lower 48 onshore oil and gas assets. BP has decided not to proceed with the development of Utica shale assets in Ohio and earlier this month also announced the decision to halt processing at its Bulwer refinery in Australia.

US legal update

A US court has yet to rule on either the first or second phases of the MDL 2179 trial in New Orleans and could issue its decision at any time. The next phase, in which the court will hear evidence regarding the penalty factors set out in the Clean Water Act, has been scheduled to begin in January 2015.

The total cumulative net charge for the Gulf of Mexico oil spill remains at US$ 42.7 billion. This does not include any provision for business economic loss claims that are not yet received, processed and paid. BP continues to contest the payment of those business economic loss claims, which it believes to be unfounded.

Adapted from press release by Katie Woodward

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