bp’s blueprint for driving efficiency, innovation – and value – in the Permian Basin

^{This story was originally published in the Texas Tribune. It’s part of a series explaining how bp is investing in America.}

bp's US onshore oil and gas business, bpx energy, has delivered some of the most productive and highest value oil and gas wells in the US onshore sector.

The business has modernized its operations to run more efficiently, and is now a top oil and gas exploration and production company. It has also become core to bp’s delivery, and is expected to be a key source of growth through this decade, and beyond.

What does it look like when you embed a company that can move, learn and function like an independent – but inside the balance sheet of a global energy company, at scale? You get a top tier exploration and production company.

Nowhere is the success of this model more apparent than in the Permian Basin, America’s largest oil-producing field.

1. It started with a commitment to infrastructure

After bp acquired its Permian assets in 2018, bpx began looking for ways to enhance production while lowering emissions and flaring.

“We recognized early on when we acquired the assets that flaring so much of our gross gas stream was just not going to be acceptable,” says Kyle Koontz, bpx’s CEO. “So, we quickly started thinking about how to capture and sell that gas. We needed a facility strategy that could process all the resource.” 

bpx soon developed a highly sophisticated oil, gas and water separation system to act as a “hub-and-spoke" for future well delivery, which involves building highly automated facilities to gather and process hydrocarbons, and then developing wells around those hubs to fill them. Each of those centralized facilities is also connected to pipelines to market the company’s resources.

bpx launched Grand Slam, its first centralized Permian processing facility, in 2020 and brought a similar one named Bingo online in 2023, followed by Checkmate in 2024. Those three facilities combined have a throughput capacity of more than 100,000 barrels gross of oil and associated gas per day, and the business is expected to open a fourth in 2025.

The centralized processing facilities can help recover an additional 5 to 10 percent of gas from product streams.

Leveraging this infrastructure, bpx has dramatically reduced flaring from its operations. The business now flares less than 0.5 percent of the gas from its wells, down from 15 percent during the fourth quarter of 2019.

2. Utilizing technology to improve efficiency

bpx is improving its drilling program, leveraging the latest technology, and driving innovation wherever possible. The company uses proprietary automation software from its oilfield-service providers to deliver faster drilling and reduce wear on equipment, helping the business reduce cycling times and drive further efficiencies in its Permian operations.

The technology allows rigs to adapt to subsurface conditions in real time without manual intervention, increasing the rate of rock penetration and helping prevent excessive vibrations, bit wear and other common drilling problems. 

The business also uses a bpx-developed, physics-based analytics approach referred to as RTAN, or rate transient analysis. RTAN helps determine the optimal amount of hydraulic fracturing fluid and solids to inject into a well to maximize production and value.

bpx’s goal is to get the most volume per dollar spent on completions, which accounts for a disproportionate amount of a well’s cost, making this critical to capital efficiency. The business estimates RTAN has already contributed over $1.5 billion of value creation since 2020. 

3. Electrification

One of the ways bpx is increasing its Permian Basin production with fewer operational emissions is by building substations and distribution lines with capacity to serve over 200 megawatts of demand from its operations. With this electrical infrastructure in place, bpx electrified 95% of its Permian wells at the end of 2023.

bpx now uses electricity to power many of its operations in the Permian, including drilling, pumping, compressing gas for recovery and running air compressors that operate controls – all activities that traditionally involved diesel or natural gas-fired power.

The business is also using electric well-completions equipment to reduce operational costs and emissions. Compared to using traditional diesel-powered equipment, these electric fleets can achieve 8% greater efficiency, as measured by pumping hours per day, and about 15% lower emissions.

Additionally, removing combustion engines in compressors and generators at well sites has helped bpx reduce its Permian methane intensity by more than 3% since 2019. The business now consistently achieves below 1% methane intensity – one of the lowest among peers in the region.

Electricity is also currently less expensive than running equipment on diesel generators, and it can increase reliability and uptime.