BP CEO: It's time to increase U.S. production of gas
Ron Bousso
HOUSTON, 11 March - BP will increase U.S. Natural Gas production in its onshore shale operation following the recent rise of domestic gas prices. CEO Murray Auchincloss announced this on Tuesday.
Auchincloss said at the CERAWeek Conference in Houston that "with rising gas prices, it is time for the Haynesville basin" in eastern Texas.
As new LNG export terminals on the Gulf Coast ramped-up, the benchmark U.S. Natural Gas prices more than doubled in the last year to $4.4 per million British Thermal Units (mmBtu).
BP's onshore U.S. shale operation produced 434,000 barrels equivalents per day last year. According to the full-year results, 264,000 of those boepd were natural gas, mainly associated with crude output.
The Haynesville basin had two rigs, compared to four in the oil-rich Permian basin and four in the Eagle Ford basin. The U.S. shale gas basin has natural gas reserves of 5.5 billion cubic foot.
Auchincloss, the company behind Auchincloss, announced last month that it would cut investments in renewable energies and increase spending on oil to $10 billion annually. This is a major shift in strategy aimed at increasing earnings and investor confidence.
BP has now scrapped a prior goal of reducing output in the next decade and instead aims to increase oil and gas production between 2.3 and 2.5 million boepd by 2030.
Auchincloss stated that the U.S., as well as the Middle East, will play a key role in the renewed attention on oil and natural gas.
Last year, BP approved the development of Kaskida, an oilfield located in the Gulf of Mexico. The Kaskida field is situated in a complex geological formation called the Paleogene.
Auchincloss stated that BP will be moving ahead with a Paleogene 2 development, Tiber.
"We are in a fantastic position here on the Gulf of America." He said that in the Paleogene, we had 10 billion barrels of oil and gas.
He said that BP intends to explore the basin for additional resources.
"We believe this is the next phase of Paleogene development in the Gulf of America." (Reporting and editing by David Gregorio, Ron Bousso).
(source: Reuters)
