BP PLC expects its Trinidad and Tobago unit, BP Trinidad & Tobago LLC (BPTT), to provide 20% of its global growth in its upstream business over the next 3 years, according to Bernard Looney, the company’s chief executive, upstream.
Speaking at the Trinidad and Tobago’s Energy Chamber annual energy conference in Port of Spain, Looney said the Caribbean twin-island nation remains a crucial part of BP’s future plans.
“One in five barrels. That is around 20% of our global growth coming from Trinidad and Tobago. Furthermore, Trinidad has a vital role to play in the world’s transition to a lower-carbon future, one in which gas, as the cleanest fossil fuel, plays an increasing part. To that end, we are looking as a company to increase the percentage of gas in our portfolio to at least 60% within the next decade.”
To achieve this, he announced that BP is investing in new seismic surveys as well as exploration drilling in the deepwater with its partner BHP Petroleum Ltd. as well as in its own acreage in the Columbus basin, where the firm spudded the Savannah well last month.
“There’s more to come, with plans to spud four further exploration wells in the near term. That will add as much as $6 billion of investment since 2013. All of which is helping bring on stream much-needed additional production that will start to alleviate the ongoing gas supply shortfalls. We are bucking a trend: maintaining investment at a time when it’s been falling across our industry.” Looney told conference attendees.
He also warned against complacency returning to the industry based on signs of improved global prices arguing that the $50/bbl crude-oil price was the “new normal” and called for a continued push to greater efficiency.
“I hear people talking about, or hoping for, prices returning to previous levels. That leads in our opinion to a huge risk of letting our old habits reappear. Of letting costs rise with prices. We simply cannot—and must not—let that happen. I believe…that where we are right now is the new normal.”
He said while global demand for energy is still strong and looks set to be about a third bigger in 20 years’ time as emerging economies grow and prosper the economics of oil and gas are changing. Looney argued that there is oversupply as technology has now made oil and gas abundant, while there is also a global desire to move towards a lower-carbon global economy.
“This is a transition that needs to happen. It is already happening. Renewable energy is growing faster—much faster than any other kind of energy.” Looney said.
With that in mind, he said oil and gas companies need to be able to stay in business by adapting to the new realities and be innovative and save costs.
He said a simple example was BPTT’s team saving $20 million on the Juniper drilling program by delivering the wellheads early to allow batch installation. That means installing them all upfront together.
Trinidad and Tobago is BP’s largest producing area and is responsible for 17 percent of its global supplies.