KEY POINTS
- BP plans to ramp up U.S. natural gas production in shale basins.
- Rising domestic gas prices drive renewed focus on Haynesville.
- BP aims for 2.3-2.5 million boepd production by 2030.
Following a recent spike in domestic gas prices, BP intends to increase U.S. natural gas output at its onshore shale projects, CEO Murray Auchincloss announced Tuesday.
BP eyes Haynesville expansion as U.S. gas prices rise
Auchincloss, speaking to the Haynesville basin in eastern Texas, stated during the CERAWeek energy conference in Houston that “the time has come for the Haynesville” due to rising gas prices.
A benchmark Over the past year, the price of natural gas in the United States has more than quadrupled, hitting approximately $4.40 per million British thermal units. The growth of LNG export terminals along the Gulf Coast has contributed to the increase by increasing demand for domestic production.
BP’s onshore shale operations in the United States produced 434,000 barrels of oil equivalent per day (boepd) in 2023. In the company’s full-year statistics, natural gas accounted for 264,000 boepd of that total, mostly related to crude oil production.
BP now has two drilling rigs in the Haynesville basin, while the oil-rich Permian and Eagle Ford basins each have four rigs. The company’s U.S. onshore shale portfolio contains 5.5 billion cubic feet of natural gas reserves.
Auchincloss announced a strategic change last month that will increase yearly spending on oil and gas projects to $10 billion while decreasing investments in renewable energy. The goal of this action is to boost investor confidence and earnings.
Reversing its earlier goal to cut output during the decade, BP’s updated strategy now calls for oil and gas production growth to reach between 2.3 and 2.5 million boepd by 2030.
Auchincloss underlined that BP’s renewed emphasis on oil and gas will be heavily influenced by the US and the Middle East.
Gulf of Mexico projects drive BP’s future production plans
The construction of the Kaskida oilfield in the Gulf of Mexico was authorized by BP in 2023. The Paleogene geological formation, which contains the area, is renowned for its intricate features and substantial resource potential.
According Reuters, Auchincloss also disclosed plans to proceed with the development of another Paleogene project later this year: the Tiber oilfield.
Here in the Gulf of America, we have an amazing location. Auchincloss stated, “We have 10 billion barrels of oil and gas resources in the Paleogene.”
BP plans to investigate the basin for more resources.
He continued by saying, “We believe this is the next wave of development in the Paleogene in the Gulf of America.”
