BP Expects Lower Production, Refining Margins -- Energy Comment
February 04 2020 - 6:18AM
Dow Jones News
By David Hodari
Shares in BP PLC (BP.LN) were sharply higher Tuesday morning
after the company said it was raising its dividend, despite
reporting a 26% drop in fourth-quarter earnings. Here are some
other remarks from the report:
On upstream developments:
"In 2019 BP announced seven discoveries. In December, it
confirmed the success of a three-well drilling campaign offshore
Mauritania and Senegal, offering the potential for possible future
developments. The Alligin project, a tie-back to the Quad 204
development west of Shetland, UK, began production ahead of
schedule in December and was the fifth Upstream major project
start-up of 2019. The Raven project in Egypt is now expected to
come onstream around the end of 2020. Final investment decisions
for five further projects, in the US Gulf of Mexico, UK North Sea,
Azerbaijan and India, were taken in 2019."
On upstream disposals:
"In November BP agreed to sell its interests in the onshore San
Juan and Arkoma fields in the US. In early January 2020, BP
announced it had agreed terms to sell its interests in the Andrew
area and in the Shearwater field, both in the central UK North
Sea."
On the upstream outlook for 2020:
"We expect full-year 2020 underlying production to be lower than
2019 due to declines in lower margin gas basins. We expect reported
production to be lower due to the above factor and the impact of
the ongoing divestment programme. We expect first-quarter 2020
reported production to be lower than fourth-quarter 2019 due to the
impact of our ongoing divestment programme and planned seasonal
maintenance and turnaround activities."
On downstream strategic progress:
"In December, BP signed key agreements with Reliance Industries
Ltd. to form a new fuels marketing joint venture, which will build
on Reliance's existing network of retail sites in India and include
access to the country's aviation fuels market. A consortium of
leading companies across the PET plastics value chain, including
BP, was formed. It aims to help accelerate the commercialisation of
BP's enhanced recycling technology, BP Infinia, which is capable of
processing currently-unrecyclable plastic waste."
On the downstream outlook for 2020:
"Looking to the first quarter of 2020, we expect lower levels of
industry refining margins and wider North American heavy crude oil
discounts compared with the fourth quarter of 2019."
On 'advancing the energy transition':
"In December BP increased its interest in its solar joint
venture Lightsource BP, creating a simplified equal ownership
structure with the company's management. The cash injection will
support Lightsource BP's planned continuing rapid growth. The
formation of the BP Bunge Bioenergia joint venture has completed.
BP's 50% share in the company represents a 50% increase in BP's
Brazilian biofuels and biopower business. BP continued to progress
its advanced mobility agenda in 2019, forming an electric vehicle
charging joint venture in China with DiDi and beginning the roll
out of 150kW ultra-fast electric chargers on BP forecourts across
the UK."
On wind:
"Net wind generation capacity was 926MW at 31 December 2019,
compared with 1,001MW at 31 December 2018 . BP's net share of wind
generation for the fourth quarter and full year was 785GWh and
2,752GWh respectively, compared with 933GWh and 3,821GWh for the
same periods in 2018. The lower production and reduced capacity in
2019 is due to divestments in the fourth quarter of 2018 and second
quarter of 2019."
On solar:
"Lightsource BP has an operating portfolio of 2GW of solar
projects under its management and has plans for 10GW of developed
assets by the end of 2023. During the fourth quarter BP increased
its shareholding, to become an equal partner in the business, with
the balance of shares continuing to be held by Lightsource BP's
management and staff. In November, Lightsource BP became the first
company in the UK to provide a reactive power service from a solar
plant at night following a successful trial at its East Sussex
solar plant. The trial follows three years of testing and
development working with UK Power Networks and the National Grid
Electricity System Operator."
Write to David Hodari at david.hodari@wsj.com
(END) Dow Jones Newswires
February 04, 2020 06:03 ET (11:03 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Bp (LSE:BP.)
Historical Stock Chart
From Aug 2024 to Sep 2024
Bp (LSE:BP.)
Historical Stock Chart
From Sep 2023 to Sep 2024