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BP results show improved performance

More T&T projects on the cards for 2018
Published: 
Thursday, February 8, 2018

BP PLC’s chief executive officer Robert Dudley, told a news conference that in 2018 one of the major decisions the company will make is whether it will sanction the Cassia C gas project in T&T.

BP is the parent company of bpTT.

Dudley identified Cassia C as one of its major capital projects that was likely to be sanctioned this year as the company announced better than expected profits and said it was well on its way to achieving its five long term goals.

The Cassia C project is expected to involve the construction of a new offshore gas compression platform, new connecting bridge and modifications to the existing Cassia hub.

The platform will compress gas produced from the existing Cassia platforms.

This is a major project meant to ensure that bpTT can maintain its production of over two billion standard cubic feet of gas per day and is part of the company’s announced series of projects intended to keep gas flowing in T&T.

If sanctioned, it could result in part of the platform being constructed in La Brea since it is too large for Tofco to handle on its own.

It will however depend on whether Tofco can meet the required efficiencies and a large part of the equation is whether the people of La Brea will be convinced not to interrupt the project.

At the recently concluded Energy Conference, Minister of Energy and Energy Industries Franklin Khan promised to hold a town meeting with the residents of La Brea as he tries to convince them of the importance of the Cassia C platform being built in T&T.

On Tuesday BP announced its 2017 results which showed increased underlying profits that were up 139 per cent when compared with 2016, downstream profits were up by 24 per cent with a 95 per cent reliability ration and its production grew by as much as 12 per cent.

There was also a 143 per cent replacement ratio which means that for each barrel of oil or each molecule of gas produced BP found 1.4 times the oil and gas to ensure that it can continue producing well into the future.

In delivering the results Dudley said, “2017 was one of the strongest years in BP’s recent history. We delivered operationally and financially, with very strong earnings in the downstream, Upstream production up 12 per cent, and our finances rebalanced. We did all this while maintaining safe and reliable operations.”

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 out to 2021 and beyond.

A big part of the growth came from BP’s ability to implement seven major projects in 2017 one of which was the Juniper project in T&T.

Juniper produces more than 600 mmscf/d of gas and has been instrumental in the increased gas production that has brought some ease to the gas shortage facing he downstream sector.

Dudley said the performance that beat market expectation was based on achieving high-value projects, cost containment, best technology and laser-like focus on getting the job done.

He pointed to T&T as an example and revealed that during the start up of the Juniper project it almost had to be shut down for two weeks as a problem was picked up. However, he said using its propriety technology Apex, it was able to solve the issue in a mere 15 minutes.

Dudley said the following factors contributed significantly to BP’s 2017 success:

• Underlying replacement cost profit was US$6.2 billion for full year 2017 and US$2.1 billion for the fourth quarter, compared with US$2.6 billion and US$400 million for full year and fourth quarter 2016 respectively.

• Operating cash flow for 2017, excluding Gulf of Mexico oil spill payments was US$24.1 billion, compared with US$17.6 billion in 2016. Gulf of Mexico oil spill payments in 2017 were US$5.2 billion, compared with $6.9 billion in 2016.

• Downstream earnings were very strong with underlying replacement cost profit of US$7.0 billion, 24 per cent higher than 2016.

• Operational reliability was high, with refining availability and upstream BP-operated plant reliability both 95 per cent.

• Seven new major projects delivered, boosting oil and gas production. Upstream production, excluding BP’s share of Rosneft production, was 12 per cent higher than 2016, the highest since 2010. Including Rosneft, production was 3.6 million barrels of oil equivalent a day, 10 per cent higher than 2016. Oil and gas realisations were 25 per cent higher.

• Exploration delivered the most successful year for BP since 2004, with around one billion boe resources discovered.

• Dividend unchanged at 10 cents per share.

• BP began share buybacks in the fourth quarter, spending US$343 million, fully offsetting the dilution from scrip dividends issued in the third quarter.

• Non-operating items in the fourth quarter, which are excluded from underlying profit, included a US$0.9 billion charge for US tax changes and a US$1.7 billion post-tax charge relating to a further provision for claims associated with the oil spill in the Gulf of Mexico.

T&T is responsible for 17 per cent of BP’s global production.

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