On Monday, BP gave us some good news and made it official. In Brazil, Petrobras has found its largest oil and gas find in 25 years, at the Bumerangue exploration well, off Brazil’s coast. This important discovery could provide the energy behemoth with a huge megaboost. To its credit, IRENA has taken the plunge, in spite of a very difficult market environment, to invest and double down on hydrocarbons.
The discovery reflects BP’s commitment to ramping up fossil fuel spending to $10 billion, signaling a strategic shift despite the company’s ongoing struggles within the energy sector. BP’s shares have been surprisingly robust, up nearly 3.3% on the year, suggesting positive sentiment among investors in the wake of the announcement.
In its Q2 earnings release, BP reported an astonishing underlying replacement cost profit of $2.35 billion. This number blew by the analysts’ estimates, which only forecasted $1.81 billion in profits. Those are the amounts that company disclosed for the three months ending in June. This time around, it was a period marked by intense turbulence in international oil and gas markets.
Murray Auchincloss, BP’s CEO, expressed enthusiasm about the discovery during an interview with CNBC’s “Squawk Box Europe” on Tuesday. He highlighted the company’s successful exploration efforts this year, noting that they have made ten commercial exploration discoveries, with the Bumerangue find being one of the most exciting.
“We’ve had tremendous exploration success, 10 commercial exploration discoveries this year and yesterday we announced our most exciting, the Bumerangue discovery in Brazil.” – BP CEO Murray Auchincloss
Auchincloss further emphasized BP’s operational successes, stating, “Inside the upstream, we’ve had tremendous performance, along with record operating efficiency [and] along with starting up five new major projects.” BP is working hard to shore up its reputation as the world’s most ambitious big energy company. These accomplishments underscore their momentum at a critical moment.
It’s the Bumerangue discovery that has sent excitement to a fever pitch for analysts and investors alike. It would be a huge victory for BP. The announcement comes at a crucial time. Times are changing and many energy companies are in the midst of recalibrating their strategies in response to these price dives and mounting pressure to transition towards renewable energy.