Oil major BP has posted a replacement cost loss of US$485 million in Q1 2016, compared with a profit of $2.1 billion a year ago, as it battles the continuing low oil prices. Yet, the firm is set to see production levels lifted as a string of new projects come onstream through 2016-2017.
The firm's upstream segment was its biggest Q1 2016 loss maker, with a $1.2 billion loss, compared to a $372 million profit in the same period last year, despite production being 2.4 MMboe/d, or 5.2% higher in Q1 2016 compared to Q1 2015. However, the loss is less than the $2.2 billion loss posted in Q4 2015.
The oil giant took a $917 million charge for the 2010 Gulf of Mexico oil spill, taking the total to $56.4 billion.
Underlying production for the quarter decreased by 1.1%, But, the firm is expected to net a 500,000 boe/d increase in production through 2016-2017, compared to 2015, as a number of new projects start up.
These include the Quad 204 and Clair Ridge projects on the UK Continental Shelf, Juniper in Trinidad, the Taurus/Libra phase of the West Nile Delta project off Egypt and Shah Deniz Phase 2 in Azerbaijan.
BP also continues to add to its exploration pot. In January, BP was awarded three exploration licenses in partnership with Statoil and ExxonMobil in the Flemish Pass Basin offshore of Newfoundland, Canada. Additionally, BP acquired interests from Statoil in two exploration licenses in the same basin. Statoil will be the operator.
In Norway, BP was also awarded acreage at Skarv with partners Statoil, PGNiG and E.ON via ratification of the 2015 open license round. BP will be the operator. In aggregate, this provides acreage access of approximately 12,000sq km.
On 26 February, an exploration discovery was announced on the Nooros East prospect in Egypt, by the operator Eni, which has now tied it back for production. Eni holds a 75% stake in the Abu Madi West concession, while BP holds a 25% stake.
In the Gulf of Mexico, BP completed evaluation of the Kepler 3 discovery, drilled late in Q4 2015, and is in the process of tying this well into the Na Kika platform with the aim of starting production later this year. BP is the operator (50%) and Shell holds the other 50%.
Image: Clair Ridge modules on their way to the west of Shetland for installation last year.
