BP Share Chat (BP.)

BP has to start looking outside the box, Cars are all going to be electric by 2040 they need to get into solar energy. Oil is going to be so cheap by then.

About time.

excellent turnround this morning..

continued

Upstream production was 10 per cent higher than a year ago, reflecting the acquisition of resources in Abu Dhabi and the start-up of several new oil and gasfields in the North Sea, Egypt, Trinidad and Tobago and elsewhere.

Compensation payments related to Deepwater Horizon nudged up net debt to $39.8bn at the end of the quarter, from $30.9bn a year ago. But Brian Gilvary, chief financial officer, said the figure would begin to drop in the second half as Deepwater Horizon expenses go into decline.

Capital expenditure of $7.9bn in the first half was down from $8.7bn in the same period last year and just short of half way towards the lower end of BP’s $15bn-$17bn forecast for the full year. Mr Gilvary said the group had flexibility to trim capital spending further if the oil market went into renewed decline.

BP is aiming to drive down costs to the point that it can make money with crude prices below $40 per barrel in a sign of the industry accepting weak prices are here to stay.

Bob Dudley, chief executive, said he wanted to reduce BP’s cash flow break-even point — the oil price needed to cover its capital expenditure and dividends — “into the $30s” over the long term.

He set the goal after unveiling better than expected second-quarter profits, which, following similar results from Royal Dutch Shell and Total last week, showed how Europe’s oil majors are adapting to prolonged price weakness.

BP lowered its break-even point to $47 per barrel in the first half, allowing it to generate $6.9bn of free cash flow — 31 per cent more than in the same period last year — at an average oil price of $48 per barrel.

Mr Dudley said BP was working on the assumption of crude prices remaining locked in their current $45-$55 per barrel range into next year, as buoyant supplies from US shale producers vie with efforts by Opec producer nations and Russia to curb output.

“If we can bring the cash balance down into the $30s it would make us a very healthy, profitable company,” he told the Financial Times.

BP has already reduced its unit production costs by 40 per cent since 2013, when the industry was gorging on oil prices above $100 per barrel before the market crashed the following year. Mr Dudley said there were further savings to be found in the supply chain and by taking advantage of data and technology to increase efficiency.
His comments reflect continued pressure on the world’s biggest oil and gas companies to increase the competitiveness of their conventional resources against flexible and relatively low-cost US shale production.

Mr Dudley acknowledged that US shale had become the world’s “swing producer,” with a “dampening effect” on cyclical swings in the market because shale wells can be ramped up quickly when prices rise and mothballed when they fall.

This was forcing BP to be highly selective about where to invest, he said, with only the most attractive projects receiving capital. The group took a $750m writedown in the second quarter on an exploration block in Angola which it decided to relinquish because it was deemed uneconomic to develop.

The Angola charge caused earnings to fall by 5 per cent from last year to $684m, but this was well above the $500m consensus forecast by analysts. BP shares were up 3 per cent on Tuesday afternoon at 459.10p. Lydia Rainforth, analyst at Barclays, called the results “positive” with signs that cash flow momentum was continuing to build.

Despite its tight rein on spending, BP has increased investment over the past 12 months as it rebuilds its portfolio after years of retrenchment since the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, which cost the group about $62bn.

Upstr

Gas - true - I'm enjoying the ride on UKOG, our big players need to get in quick before a foreign investor holds them to ransom

The nisan leaf pure electric (one of the most efficient) emits more co2 per mile than a diesel mededes E220 when using the current mix of electricity generation in the UK. I can understand going electric in the large citys but why should the rural population suffer another example of the metropolitan elite group think that will cause more harm than good.
Also think BP are a bit slow on UKOG looks like the french are going to take them (what a shame) AIMHO.

Unless anyone has missed it, BP are starting to diversify into LPG. Oil will be required for decades to come there is India etc who will not be in a position for electric. It's taken this government over 10 years to decide about HS2 and not a hole has started yet. This is just a smokescreen for the government to add 10p per litre to fuel and blame petrol... also where will they get all of the charging points, if you live in a terraced house are you going to trail a cable over the pavementable? - NOT

...short lived:

https://uk.advfn.com/news/DJN/2017/article/75356761

the "right on" left wing try their best to make entry into London in any vehicle difficult and expensive.They are the first to complain when housing and infrastructure standards are not met.I was born in London but would rather live almost anywhere than there or indeed any large city.
we are making no progress with nuclear power stations..Germany have rejected them altogether! Where all this power ,reliable power is coming from I cannot conceive.I wrote a piece for a Lithium board 3 years ago saying Li demand would increase from utility storage requirements worldwide ....Very little is happening.It`s pie in the sky for the majority and an expensive hobby for the few driving all electric.IMO ,Stick to improving Hybrids..The electric function is becoming more relevant as traffic means no one gets anywhere in this country very fast.I spent 5 years doing mkt research projects for Toyota(and others) 20 years ago.For me ,a Hybrid appeals ,electric? Nah.As for pollution..One big volcano would do more damage than the human race have done since they crawled out of the ocean.Thats not to say sensible policies should not be pursued,but the whole AlGore bullcrap is patent overhyped nonsense.