Despite The Doom and Gloom25 Nov 2023 15:19
The following from Seeking Alpha
Attractive pipeline
BP has a top-tier upstream pipeline and expects upstream production to increase to 2.3mboe/day by 2025, vs. 2.25mboe/day the previous year. 9 high margin projects with attractive project economics will be commissioned including Seagull in the UK, Mad Dog phase 2 in the US, etc. adding ca. 200kboe/day in new capacity. In addition, BPX (the US onshore operation) will be adding more than 100kboe/day. BPX should grow well into 2030, increasing production by nearly half vs current levels to nearly 650kboe/d. Additional growth areas include the Gulf of Mexico and the UAE. Overall oil liquids production should grow by a CAGR of 3% into 2027, providing upside in a higher-oil price backdrop.
BP is focused on maintaining a mid-teen to 20% IRR hurdle rate with oil at $60/bbl. for new projects. We would also like to note that BP’s breakeven oil price has fallen by nearly three quarters from its peak, and the group is focused on cost optimization and good capital allocation. Ca. 200kboe/d of lower margin production will be divested to optimize the portfolio.
BP expects its oil and gas mix to be balanced by 2030 backed by robust gas demand. LNG supply should increase from 19 million tons per year in 2022 to 25 million tons in 2025 and 30 million tons in 2030. This is underpinned by equity and merchant projects including Tannugh Train 3, GTA Phase 1, Coral, Calcasieu Pass, etc. We believe the robust project pipeline makes possible continued high cash generation and capital returns while financing BP’s green ambitions and its transformation into an integrated energy player. BP's attractive pipeline and portfolio optimization efforts are key elements of our long thesis on BP.
https://seekingalpha.com/article/4654100-bp-integrated-energy-major-with-attractive-mid-term-returns
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