Not one to rest on its past success, BP is ramping up profit centers around the globe — including its emerging business in the deepwater Gulf of Mexico (GOM) — -which will more than make up for any declines in existing worldwide exploration and production, the group vice president of BP’s upstream said Tuesday.

Speaking at the Lehman Energy Conference Tuesday, Andy Inglis said the London-major is showing “great legs for the future” and remains committed to an upstream strategy first put in place in 1989: to create, build, produce and harvest. The four-pronged attack so far has worked well. Between 1998 and 2002, the company had more “giant” oil and gas discoveries and had higher reserve replacements at a lower cost than any of its competitors.

“Between 1998 and 2002 BP had nearly 120% reserve replacement with exploration alone,” Inglis said. He also noted that during the same period, BP had the lowest finding costs, at 91 cents/boe.

However, not one to rest on its past success and mindful of declining production worldwide, BP’s upstream has been looking toward the future and has been in the process of building five new profit centers, Inglis said. Besides the deepwater GOM, BP also focused on four other future profit centers: Trinidad liquefied natural gas (LNG), Angola, Azerbaijan and Asian Pacific LNG.

“We are confident our share of future resources will be equal or be better than what we currently are doing,” Inglis said.

BP has set itself apart in the GOM by developing world-class deepwater technology, according to Inglis. “We developed new techniques in the Gulf of Mexico to generate new discoveries. We’re making advances with world-class science.” Elsewhere, the major explores from the “top down” but in the GOM, it’s from the “bottom up,” since it has been able to remove some of the deepwater barriers with a new set of exploration tools. However, he added that its “greatest challenges lie ahead,” in even more remote deepwater exploration. “There is about 13 billion bbl discovered, and we think it’s about 30 (billion boe).”

BP, he said, is “extremely well placed” in the GOM, as the largest leaseholder in the deepwater, and with major developments ramping up each year for the next three years. Its Na Kika is scheduled to ramp up early next year but could come on line late this year, said Inglis. By the end of next year, another GOM discovery, the Holstein, will be on line. Mad Dog comes on line in early 2005, and Thunder Horse — considered one of the largest discoveries ever in the GOM — is “well on track” to be on line also in 2005. Thunder Horse also will feature the largest semisubmersible structure in the world. Another GOM discovery, Atlantis, is “on plan” to be ramped up in 2006.

All of the new GOM projects will be connected to BP’s Mardi Gras pipe system in the GOM, said Inglis. Besides oil pipes, the system will eventually deliver 1.5 Bcf/d.

“The growth in the emerging areas more than offsets declines in other areas,” Inglis said. And because of growing efficiencies from its new finds, he added that this year’s spending is expected to be at the “lower end of the range, reflecting our ability and our capital discipline.” Divestitures are expected to be “neutral” through this year, and then begin again in 2004. “We want to create new profit centers, and only select the best opportunities. We want to be defined by the quality deployed…and be a leader in the key emerging basins around the world.”

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