BP has underlined the significance of the two North Sea finds it announced last month and held out the prospect it could approve more bumper developments in areas such as West of Shetland.
Announcing a 140 per cent increase in annual profits to $6.2 billion (£4.4bn), from $2.6bn, the oil giant said the discoveries helped the firm enjoy its most successful campaign in the North Sea for years.
The comments will encourage hopes the Achmelvich find West of Shetland and Capercaillie east of Aberdeen could be on a big enough scale to help power a big increase in BP’s North Sea business.
When they were announced last month BP’s North Sea chief Mark Thomas said the company expected to double production in the area to 200,000 barrels a day by 2020.
BP’s results presentation yesterday included plenty to suggest the firm sees the potential to make lots of money in the North Sea in coming years.
The update will boost hopes the recovery in the North Sea fuelled by the increase in crude prices last year is gathering pace.
BP yesterday highlighted the size of the returns it has been generating on the investments it is making West of Shetland.
The company noted the revamped Schiehallion field was one of seven start ups that provided a big boost to profitability in 2017.
The Clair Ridge field off Shetland is one of six bumper projects due for completion this year.
The head of BP’s exploration and production business, Bernard Looney, included four North Sea fields in a portfolio of projects he said gave BP long term growth options, including two off Shetland.
Mr Looney said BP expects to make a decision on whether to proceed with two new North Sea developments this year, without naming them.
He also noted the potential to make more finds in the North Sea, which he came to know well when he was running BP’s business in the area.
The group’s chief executive, Bob Dudley, reckons BP can maintain strong growth. The company has pruned its portfolio and slashed costs in response to the crude price plunge from 2014. This compounded the challenges posed by the Gulf of Mexico oil spill in 2010, which has cost it $65.8bn.
The company has shed around 900 North Sea jobs and sold a range of assets it decided were non-core since 2014.
“2017 was one of the strongest years in BP’s recent history,” said Mr Dudley.
He added: “We enter the second year of our five-year plan with real momentum, increasingly confident that we can continue to deliver growth across our business, improving cash flows and returns for shareholders.”
BP benefited from the increase in oil and gas prices in 2017, combined with growth in its output.
Cuts in production by major exporters such as Saudi Arabia have supported the market.
BP appears confident supply and demand have been brought back broadly into balance. Finance chief Brian Gilvary said the crude price could soften this year but Brent will likely remain at above $50 per barrel, compared with less than $30/bbl early in 2016. It fetched $115/bbl in June 2014.
The company signalled its confidence in the prospects for the market in November when it became the first major to restart share buy backs since 2014. It returned $343m to shareholders before the year end. It held the fhe fourth quater dividend at 10 cents per share.
BP made $2.1bn profit in the fourth quarter on the replacement cost basis, against $0.4bn last time. Royal Dutch Shell last week said it grew fourth quarter profits by 140 per cent to $4.3bn from $1.8bn..
BP said its North Sea exploration performance in 2017 was its best since 2008 when the company made the 50 million barrel Kinnoull find north of Aberdeen.
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