10 Updates

BP Earnings Preview: Impact Of New Projects On Total Hydrocarbon Production In Focus

Apr 29 2014, 8:02am CDT | by

BP Plc. is scheduled to report its 2014 first quarter earnings on April 29. Average Europe Brent crude oil prices have been more than 5% lower year-on-year during the first quarter and will...

Filed under: news

 
 
 

12 weeks ago

BP Earnings Preview: Impact Of New Projects On Total Hydrocarbon Production In Focus

Apr 29 2014, 8:02am CDT | by

BP Plc. is scheduled to report its 2014 first quarter earnings on April 29. Average Europe Brent crude oil prices have been more than 5% lower year-on-year during the first quarter and will negatively impact the company’s crude oil revenues. Moreover, earnings would also be impacted by lower upstream production due to divestments made by the company to fund huge liabilities arising from the 2010 Deepwater Horizon incident. We will be closely watching out for the net impact of asset disposals and new project start-ups completed by the company over the past several months on its upstream production. Apart form this, we will also be looking for an update on the ongoing trials in the U.S. courts associated with the 2010 oil spill incident. (See: BP’s Downside Risk From Climbing Oil Spill Expenses )

Headquartered in London, BP is one of the world’s leading oil & gas multinationals with operations in more than 80 countries. As a vertically integrated oil and gas major, it has both upstream as well as downstream operations. The upstream division primarily includes exploration and production activities for oil and gas, while the downstream division focuses on producing refined petroleum products such as gasoline.

We currently have a $48 price estimate for BP , which is almost in line with its current market price.

See Our Complete Analysis For BP

New Project Start-Ups

BP has changed a lot over the last few years, primarily due to divestments made by the company in order to fund charges associated with the 2010 oil spill fiasco. By the end of last year, the company had completed divestments of around $38 billion. A majority of these asset sales primarily included upstream installations, pipelines and wells while the company has managed to retain most of its (~90%) proven reserves. This has led to a sharp decline in BP’s production volumes over the last three years. The volume of total hydrocarbons produced by the group fell by almost 21% since 2010 to 2,256,000 boe/d (barrels of oil equivalent per day) in 2013.
/>

In a bid to recover its lost ground, BP started production from as many as five new projects in 2012 alone. Having started 3 more last year, the company plans to bring another 6 new projects online by the end of this year. We therefore expect BP’s production volume to bottom out by the end of this year and gradually increase thereafter.

The three projects started in 2013 include the Angola LNG and the Atlantis North Expansion project in the Gulf of Mexico that began production during the second quarter, and the North Rankin 2 project that came online during the third quarter. Located approximately 85 miles off of the northwest coast of Western Australia, the North Rankin 2 project aims to extend natural gas supply from the aging North Rankin and Perseus fields by extracting low-pressure gas. Below is a summary of the 3 upstream projects that came online during the first quarter of this year.

  • In January, BP started production from the West Chirag platform of the Azeri-Chirag-Gunashli field in the Azerbaijan sector of the Caspian Sea. The company said that output from the platform would be ramped up during the year as additional wells come online. The platform has a capacity of 183,000 barrels of oil per day. BP holds a 35.8% operating interest in the project.
    />
  • In February, Shell started up the Mars B project in the Gulf of Mexico, which is expected to ramp up total hydrocarbon production from the Mars field to 100,000 barrels of oil equivalent per day (boe/d) by 2016. Last year, the Mars field produced at an average rate of over 60,000 boe/d. BP holds a 28.5% stake in the Mars B project.
    />
  • Just a couple of weeks after the Mars B project came online, BP announced the start-up of the Na Kika Phase 3 project. The project included drilling and completion of two new wells along with the development of subsea infrastructure supporting them and some new equipments to enhance production from an existing well. It is expected to boost Na Kika’s daily production rate from 130,000 boe/d to 170,000 boe/d in the coming months.
    />

Apart from these three, other projects that are slated to start-up this year are also under construction and over 75% complete, which further bolsters our belief that BP’s upstream production output should bottom out by this year. These new project start-ups are not only expected to boost BP’s upstream production rate but also its operating margins. The company expects cash operating margin from these projects to be twice as much of its average upstream margin in 2011.
/>
See More at Trefis | View Interactive Institutional Research (Powered by Trefis)

Get Trefis Technology

Like our charts? Embed them in your own posts using the Trefis WordPress Plugin .

 
Update
10

7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken into by r ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the Dewan Rak ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Da ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the southern s ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 milli ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industr ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allocation of RM20 mi ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Baz ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara Sky ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Bangladeshi plane catches fire at Nepal airport, passengers safe
Kathmandu, July 28 (IANS) A Bangladeshi aircraft caught fire while landing at Kathmandu's Tribhuvan International Airport (TIA) Monday afternoon, officials said.
 
 
Shift work can worsen asthma, pneumonia
London, July 28 (IANS) A research has found that drugs widely used to treat lung diseases like asthma or pneumonia work better with the body clock.
 
 
Decoded: What triggers sexual arousal in you
New York, July 28 (IANS) Know why just looking at an attractive face stimulates sexual arousal? Well, it takes two to tango!
 
 
Turn your selfie into emoji with this app
New York, July 28 (IANS) Tired of seeing the same yellow-faced smileys? In an age of selfies, how can emojis be far behind?
 
 
 

Latest from the Network

Hockey: India out to prove a point against Australia
Glasgow, July 28 (IANS) Having registered consecutive victories against Wales and Scotland, India will be hoping to continue their winning spree when they face defending champions Australia in their next group game of...
Read more on Sport Balla
 
England declare first innings at 569/7
Southampton, July 28 (IANS) England declared their first innings at 569 for seven on the second day of the third cricket Test against India at The Rose Bowl here Monday. Ian Bell was the top scorer with 167 while Gary...
Read more on Sport Balla
 
Hosts Scotland record best CWG gold haul
Glasgow, July 28 (IANS) Hosts Scotland recorded their highest Commonwealth Games gold haul here by picking up their 12th yellow metal Monday. Alex Marshall and Paul Foster won Scotland's historic 12th gold medal in...
Read more on Sport Balla
 
Shooters Meena, Lajja fail to win medals
Glasgow, July 28 (IANS) A lot was expected from Indian shooters Meena Kumari and Lajja Gauswami but they failed to earn a medal from the women's 50-metre rifle prone finals at the Commonwealth Games here Monday. On a...
Read more on Sport Balla
 
Gwen Stefani recommends acupuncture to pals
Gwen Stefani has been recommending acupuncture to all her friends. The 44-year-old mother-of-three started having the treatment after getting severe migraines while pregnant with her third son, Apollo, and has told all...
Read more on Celebrity Balla
 
Tom Green's 'whirlwind' marriage to Drew Barrymore
Tom Green says his marriage to Drew Barrymore was a ''crazy whirlwind''. The MTV presenter tied the knot with the 'Charlie's Angels' star in 2001 but they separated just five months later and the 42-year-old host admits...
Read more on Celebrity Balla
 
Kim Kardashian accused of kissing Brandon Jenner
Brody Jenner claims that his brother Brandon Jenner and stepsister Kim Kardashian once shared a kiss. The 30-year-old reality star blurted out the shock news during last night's (07.27.14) episode of 'Keeping Up with...
Read more on Celebrity Balla
 
Renee Zellweger lists Connecticut farmhouse for 1.6m
Renee Zellweger has put her Connecticut farmhouse on the market for the second time in three years. The large four-bedroom colonial home first went up for sale in 2011 but failed to sell and now Renee has re-listed it...
Read more on Celebrity Balla
 
India back to square one at Southampton (Analysis)
Southampton, July 28 (IANS/RAY) It was virtually back to the ignominy of 2011, as England plundered runs against a hapless Indian bowling attack on the second day of the third Test to establish a dominant position in...
Read more on Sport Balla
 
Shooter Mansher tops men's trap qualifications
Glasgow, July 28 (IANS) Indian shooter Mansher Singh topped the men's trap qualification while Manavjit Sandhu finished third at the Commonwealth Games here Monday. The qualification will continue Tuesday and will be...
Read more on Sport Balla