By Ron Bousso
HOUSTON – BP is set to ramp up U.S. natural gas production in its onshore shale operations following the recent rise in domestic gas prices, CEO Murray Auchincloss said on Tuesday.
“With rising gas prices, the time has come for the Haynesville” basin in eastern Texas, Auchincloss told the CERAWeek conference in Houston.
Benchmark U.S. natural gas prices have more than doubled over the past year to around $4.4 per million British thermal units (mmBtu) as new liquefied natural gas (LNG) export terminals along the Gulf Coast ramped up.
Last year, BP produced 434,000 barrels of oil equivalent per day in its onshore U.S. shale operations. Of that, 264,000 boepd was natural gas, mostly associated with crude oil output, according to full-year results.
It operated two rigs in the Haynesville basin compared with four rigs in the oil-rich Permian and four more in the Eagle Ford basins. It has 5.5 billion cubic feet of natural gas reserves in the U.S. onshore shale basin.
Last month, Auchincloss announced plans to slash investments in renewable energy and increase annual spending on oil and gas to $10 billion, a major strategy shift aimed at boosting earnings and investor confidence.
BP now aims to grow oil and gas production to between 2.3 million and 2.5 million boepd in 2030, after scrapping a previous goal to reduce output during the decade.
The U.S. will play a central role in the renewed focus on oil and gas, along with the Middle East, Auchincloss said.
Last year, BP gave the green light for the development of the Kaskida oilfield in the Gulf of Mexico, which lies in a highly complex geological structure called the Paleogene.
BP plans to go ahead with a second Paleogene development, Tiber, later this year, Auchincloss said.
“We have a fabulous position here in the Gulf of America. In the Paleogene we have 10 billion barrels (of oil and gas resource) in place,” he said.
BP plans to explore for further resource in the basin, he said.
“We think this is the next wave of development in the Paleogene in the Gulf of America.”
(Reporting by Ron Bousso; Editing by David Gregorio)
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