At CERAWeek, bp executives share insights on the energy landscape
bp executives took part in this year’s CERAWeek conference, sharing insights about the industry and discussing bp’s reset strategy that includes reshaping the company’s portfolio, reallocating capital to high-return businesses, efforts to drive efficiencies, reduce costs, and improve capital productivity. CERA is, of course, one of the energy world’s most influential annual gatherings in Houston.
Here are some takeaways from bp leaders:
CEO Murray Auchincloss on how shareholders are reacting to bp’s reset strategy:
“After meeting 40 percent of our shareholders over the past couple of weeks, they all seem pretty satisfied. Direction of travel is great, strategy is fine, and the clear message is now, ‘go deliver.’”
Auchincloss, on bp’s enhanced capital discipline:
“We were just pursuing a few too many things over the past five years, and it was really, really time to focus those [businesses] down to the very highest quality that compete on returns on behalf of our shareholders for the transition business.”
Auchincloss on bp’s US upstream growth plans:
“The growth that we see inside the upstream is here in the United States, first and foremost. We have a fabulous position in the Gulf of America with the Paleogene, 10 billion barrels in place. We started with the Kaskida platform last year. We're looking forward to launching new efforts with our Tiber discovery later this year as well. We've got some big appraisal and exploration wells that could make that 10 billion higher. We think this is the next great wave of development in the Paleogene in the Gulf of America. We’ve got the Lower 48, with 30 trillion cubic feet of natural gas, as well as a strong position in the Permian [Basin]. And with rising gas prices, now has come the time for the Haynesville, Eagle Ford and Hawkville in the portfolio. So, we see great growth out of the United States.”
Auchincloss on bp’s strengths:
“We think that our core strength is the upstream and the growth we have. We think our relationships and the technology that we have are distinctive. And, of course, the last thing is trading. We’re one of the world’s largest energy traders."
Ann Davies, global senior vice president of wells, on what bp’s new strategy means for the upstream:
“What’s not changed is our focus on safety and capital discipline. What’s really changing now is growth. The capital frame is increasing by 20 percent for the upstream, which is fantastic news, because we’re sitting on some really great assets. We’re not short of opportunity in terms of where to invest that capital and get return from it.”
Amber Russell, senior vice president of refining, on implications of the reset strategy for the downstream:
“What we’ve been focused on is growing in our current markets where we’re strong and building on strategic assets. It’s about taking advantage of the integration that we have between refining, midstream and trading. We have a lot of strategic markets where that has a good deal of value for us.… The other piece that’s important to us – and the people investing in bp – is our consistency with performance delivery.”
Andy Krieger, senior vice president, Gulf of America and Canada, on the role of offshore in bp’s global portfolio:
“It’s really fundamental … offshore has been and continues to be a strategic part of our portfolio and will form a key cornerstone of the growth agenda that we have between now and the end of the decade….
“It comes down to three things for bp. One is access to material volumes. Second is the very competitive returns and enduring cash flows. It’s an incredibly lucrative business, and that’s underpinned by deep technical expertise in offshore operations and managing big and complex fields. And third, it’s very much aligned with our long-term sustainability aims. If you look at the carbon intensity of our offshore barrels, they’re some of the lowest in the global portfolio.”
Davies, on how AI can enhance bp’s upstream production, operations and returns:
“We’re looking at how we can implement technology that interacts with the actual hardware, tools and rigs to make better decisions and better predictions, reducing non-productive time so we can drill more wells per year and have a better capital allocation.”
Russell, on AI’s potential at bp refineries:
“We’re seeing a lot of opportunities. You’ve got to focus on managing the data before you can digitize the work process. With our partner Palantir, we’ve combined data scientists with our engineers, and they have a platform that does this really well. One of our mottos is ‘data in the morning, insights by lunchtime.”
Orlando Alvarez, bp America chairman and president, senior vice president of gas and power trading Americas, on what policymakers can do to help meet growing demand for natural gas:
“We need permitting reform. You can increase production, but you need the pipeline to support it, or it won’t matter. We need to have a process that is efficient, that we can understand, and that is more predictable, because this is billions of dollars that goes out on investments. Getting permitting reform to the right place … will help with reducing uncertainty.”
Davies, with an endorsement of drilling careers:
“Can you imagine – as a human race – that we would stop using what’s beneath the crust of the earth? Every single country on this planet has a subsurface, and we need to understand it, and we need to know how to drill into it. Maybe it’s for oil and gas, or to inject carbon, or to use the geothermal gradient for heat, or maybe it’s for lithium. But we’re just not going to stop. We’re sending probes to drill on the moon and Mars. We’re not going to stop understanding what’s underneath us, so we’re going to need geologists, petro-technical engineers and other specialists who understand how to do that.”
