
Workers at BPX Energy’s Grand Slam project in Texas. (Source: BPX Energy)
BPX Energy is eying the start-up of its second Permian Basin processing facility, Bingo, by third-quarter 2023, as the BP subsidiary advances its black oil processing up to more than 100,000 bbl/d, the company said in its first-quarter earnings report.
The facility will double BP Plc’s operated Permian oil and gas processing capacity, de-risking future volume growth, the London-based energy giant announced on May 2.
In the Permian, BPX plans to invest $1.3 billion to $1.4 billion to build three electrified central oil, gas and water handling facilities that will assist in reducing operational emissions by replacing gas-driven equipment, compressors and generators.
The three Permian facilities will come online through 2025, BP CFO Murray Auchincloss said during the company’s May 2 first-quarter earnings webcast. Auchincloss also provided details of expected flow rates from each facility.
“The first one, Grand Slam, is about 30,000 bbl/d of black oil. Bingo is about 30,000 bbl/d of black oil. So that's building the Permian oil capacity up to 105,000 bbl/d,” Auchincloss said.
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BPX, which began operating as a standalone entity in 2015, comprises BP’s onshore oil and gas operations in the Lower 48. The company operates in the Permian’s Delaware Basin and Eagle Ford Shale in Texas and the Haynesville Shale basin in Texas and Louisiana. The company is focused on producing high-margin barrels while driving down emissions.
According to BPX, electrification is the cleanest, most efficient, reliable and cost-effective way to distribute power across an oilfield. When BP acquired its Permian Basin assets in 2018, only 4% of the operated wells were electrified. By 2022, 80% of its operated wells were electrified. BPX aims to achieve 95% electrification by the end of 2023, according to its website.
BP eyes 200,000 boe/d by 2025
BP continues to transform into an integrated energy company. By 2025, the company is eying around 200,000 boe/d of high-margin production from nine major projects.
The start-up of Mad Dog Phase 2 in the U.S. Gulf of Mexico and KGD6-MJ offshore India, which is in the final stages of commissioning with two wells opened to flow gas and full start-up expected later this quarter, will “underpin over one third of this volume as they ramp-up during 2023, with further start-ups expected this year,” BP said in its first quarter of 2023 release.
First quarter profits hit $8.2 billion
BP reported profits of $8.2 billion during the first quarter compared to $10.8 billion in fourth-quarter 2022, the company said in its earnings release. Capex in the quarter was $3.6 billion, and the company expects capex to range between $16 billion and $18 billion in 2023, including inorganic activities.
Auchincloss said the company wants to execute an additional $1.75 billion share buyback prior to announcing second-quarter 2023 results.
Additionally, BP plans to continue to advance some other big-ticket items in the next quarter.
“Looking ahead, in the second quarter we will make a scheduled payment of $1.2 billion relating to the Gulf of Mexico oil spill settlement and, subject to shareholder approval, we expect to complete the $1.3 billion acquisition of TravelCenters of America,” Auchincloss said.
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