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2017 is shaping up to be an historic year for BP

14/07/2017
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We’ve over half-way through 2017, but BP is in the midst of making this year one of the biggest in the company’s history by bringing on seven major projects by year end.

Bob Dudley, Chief Executive of BP is aware that oil prices are likely to remain “lower for longer but not forever” and has been “planning the next five years with a $55 to $60 oil price” in mind.

BP is investing in new projects on this basis- ensuring that can be viable at low oil price levels for long periods of time. 

With the decision made to go ahead, 2017 has seen a phenomenally high amount of activity for BP as it seeks to get all 7 of the new projects online. Consider the following; in 2011 BP logged 8 million work hours, whilst in 2017, BP is expecting to log 88 million hours for projects under construction around the world.

BP’s seven projects are spread globally and represent the company’s ongoing commitment to Oil & Gas production. As Dudley has said, “we’re about 50% oil today. I think into the next decade, we’ll be up to 60% with the size of these projects, Egypt, Shah Deniz, Oman and others”.

Let’s take a look at BP’s seven projects in more detail:
Freshly completed in May the Quad 204 project is to play an important part in BP's future North Sea activity
Image via BP

1. Quad 204 (North Sea)
Freshly completed in May, the Quad 204 project has involved the construction and installation of the world’s largest harsh water floating, production, storage and offloading (FPSO) vessel- the ‘Glen Lyon’. The project also saw a major upgrade and replacement of subsea facilities as well as a continuous drilling programme of up to 20 new wells.

BP is planning to double its North Sea production to 200,000 boe/d by 2020, and the Quad 204 project is to play an important part in fulfilling this ambition.

As BP Chief Executive, Bob Dudley said about the project:

“The start of production from Quad 204- one of the largest recent investments in the UK- is an important milestone for BP, marking a return to growth for our North Sea business.”
The West Nile Delta project involves the development of five gas fields to supply Egypt
Image via BP

2. West Nile Delta (Egypt)
The West Nile Delta project involves the development of five gas fields across two BP-operated offshore concession blocks, North Alexandria and West Mediterranean Deepwater.

With production beginning back in March, BP now expects the five fields to yield up to 1.3 billion cubic feet a day (bcf/d), equivalent to about 30 per cent of Egypt’s current gas production.

BP views the West Nile Delta project as an important commitment to Egypt, saying:

“West Nile Delta is a strategic national project that will add significant gas production to the Egyptian market and is another example of BP’s commitment to Egypt. Our continuing investments in the country, including West Nile Delta, Atoll and our recent investment in Zohr, are laying the foundations for growth for BP in Egypt well into the future.”
The Trinidad Onshore Compression facility came online in April to help increase production from wells in the Columbus Basin
Image via BP

3. Trinidad Onshore Compression (Trinidad & Tobago)
April saw the Trinidad Onshore Compression project reach completion. The project aims to increase production from low-pressure wells in the Columbus Basin using an additional inlet compressor at the Point Fortin Atlantic LNG plant.

Once fully online the Trinidad Onshore Compression facility will be able to deliver around 200 million standard cubic feet of gas per day. It is expected that peak annual production from the facility will reach 35 mboed (gross).

BP has invested $2 billion in the Juniper project with the expectation that it will produce 590 million standard cubic feet of gas per day
Image via BP

4. Juniper (Trinidad & Tobago)
BP has invested an enormous $2 billion in the Juniper project in the expectation that it will produce approximately 590 million standard cubic feet of gas per day from five subsea wells.

Juniper will consist of a platform and corresponding subsea infrastructure, producing gas from the Corallita and Lantana fields which are located 50 miles off the south-east coast of Trinidad. Peak annual production from Juniper is expect to reach 95 mboed.

Construction of the project is still underway; however, BP say that the project is on-track and expected to be complete by the close of 2017.

Located north west of Karratha, Western Australia, the Persephone gas field is being developed by BP as an  LNG play
Image via Woodside Energy

5. Persephone (Australia)
Located 85 miles north-west of Karratha, Western Australia, in a water depth of 415 feet, the Persephone gas field is being developed by BP as an LNG play.

The project involves a two well subsea tieback to the existing North Rankin complex, and BP is expecting to achieve a peak annual production from the project of 50 mboed (gross).

BP are not alone on this project. Persephone is being developed by a partnership of companies including Woodside Energy (16.67%), BHP Billiton Petroleum (16.67%), BP (16.67%), Chevron (16.67%), Japan Australia LNG (16.67%), and Shell (16.67%).

BP's Khazzan Phase 1 project will involve the drilling of 200 wells and the construction of a two-train central processing facility
Image via BP

6. Khazzan Phase 1 (Oman)
Involving the drilling of 200 wells and the construction of a two-train central processing facility, BP’s Khazzan project is an ambitious attempt to create a major new source of gas supply for Oman.

The project is expected to develop approximately seven trillion standard cubic feet of gas and deliver plateau production of one billion standard cubic feet of gas per day and 25,000 barrels per day of gas condensate.

First gas from the project is expected in late 2017.

BP sees the Khazzan project as representative of how projects should be conducted in the low-price environment: “the team in Oman has done a great job in maximising efficiency and value, so the new development will be more competitive in today’s tough conditions. This is the kind of performance that will enable BP to withstand low oil prices and also build for the future.”

Zohr field, which is thought to be the largest ever gas discovery in the Mediterranean, is another one of BP's major projects for 2017.
Image via ENI

7. Zohr (Egypt)
Thought to be the largest ever gas discovery in the Mediterranean, with up to 30 trillion cubic feet of new gas resources, the Zohr field is another one of BP’s major projects for 2017.

Located around 120 miles north of Port Said in waters of approximately 4,900 feet deep, the Zohr field is expected to produce 440 mboed annually at peak.

The project will involve the construction and installation of an offshore control and production platform, which will further be connected to an onshore processing plant by means of subsea pipelines.

Production from the field is expected to begin this year with full capacity being reached by 2019. The full field development plan will see the drilling of 254 wells over the field’s production life.

A new price environment drives a new production environment

These new projects are much needed good news for the global Oil & Gas industry. But the nature of the projects provides a glimpse of what new projects will look like in the future- leaner, more efficient and a vastly increased use of local nationals over expatriates. The Khazzan project is a case in point. Half of BP Oman’s leadership team is Omani. By 2020, BP is aiming for 90% of its Khazzan project workforce to be from Oman.

These projects will be critical to the success of BP over the coming decade, especially as the company seeks to consolidate and build upon the cost and efficiency gains secured in the last two years as BP underwent wrenching adjustments to its assets and manpower base.

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2017 is shaping up to be an historic year for BP - Time to read 7 min
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