BP has scored a huge victory. They have announced their biggest oil and gas find of the 21st century, marking an impressive return to form for the UK-domiciled company. This finding takes place in Brazil’s deep waters west coast. It’s BP’s farthest from shores discovery since the Shah Deniz gas field in the Caspian Sea of 1999.
The announcement was made by Gordon Birrell, BP’s executive vice president for production and operations, who emphasized the discovery’s importance for the company’s future plans. Currently BP is just doing tests at the site to determine the full extent of the find’s potential. BP is considering the creation of a new production hub around this newly discovered site. Combined with its recent organizational changes, this move would dramatically expand its operational capacity.
“This is another success in what has been an exceptional year so far for our exploration team,” Birrell stated. This feeling of optimism underlines BP’s successful turnaround. Equally important, the company has made its way through a painful storm filled with huge losses and a pivoting business model.
Oil giant BP, which suffered one of its worst annual losses in 2020 at $5.7 billion mainly driven by the impacts from the Covid-19 pandemic. In 2022, it got much worse. BP had to take a record-setting $25 billion loss when it wrote down its share in the Russian energy firm as soon as the war in Ukraine started. These happenings prompted the firm to reassess its investment thesis. Consequently, they announced cuts to their planned renewable energy investments earlier this year.
In reaction to these pressures, BP has reallocated capital away from the alternatives energy department and back towards its oil and gas operations. The company is promising to invest billions more annually in these three sectors. This strategy move dovetails with BP’s desire to reassure investors as the company weathers shifting market tides.
The latest discovery not only underscores BP’s recovery but signals potential growth opportunities in Brazil’s energy landscape. BP is still deeply in the red from the pandemic. This key, unexpected find could reshape its day-to-day focus and unlock an unprecedented opportunity to bolster its position in the burgeoning market.