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BP announced it will drill a new oilfield in the Gulf of Mexico as the energy major’s second-quarter profits surpassed forecasts.
The London-listed company said on Tuesday that it would build a sixth platform in the Gulf of Mexico to tap 80,000 barrels of oil a day from the Kaskida field, which it first discovered in 2006.
BP chief executive Murray Auchincloss, who was appointed to succeed Bernard Looney last year, has promised to shift the group’s focus to expanding its core oil and gas business and returning more cash to shareholders.
“Our recent go-ahead of the Kaskida development in the Gulf of Mexico business [ . . . ] demonstrates our commitment to delivering as a simpler, more focused and higher value company,” said Auchincloss as the company reported results.
He described Kaskida as “really cool”, adding: “It is 10bn barrels of oil in place in the Gulf of Mexico. This first sanction is 275mn barrels at less than $5bn (cost).”
“It is a very high quality project in a very high quality regime. The blocks are well known so there’s less risk. You know, [the world is using] over 103mn barrels of oil a day right now with natural reservoir decline of somewhere around 3 to 5 per cent (a year). The world needs new developments and this is a low carbon, high quality investment and we’ll continue to do those in the future.”
Its underlying profit for the second quarter reached $2.8bn, beating analysts’ forecasts of $2.5bn and helped by a lower tax bill.
BP raised its dividend by 10 per cent to 8 cents a share and said it would continue buying back $1.75bn of shares a quarter for the remainder of the year.
The company’s shares rose 1 per cent to 458.5p by late morning in London trade.
BP is expanding in the Gulf of Mexico even though its own projections show the world’s oil demand will have peaked by the time the field starts production in 2029.