BP plc executives are hopeful that they can complete “in a few days” the $7.8 billion settlement tentatively reached last month with thousands of individuals and businesses that were impacted by the April 2010 Macondo well blowout in the deepwater Gulf of Mexico (GOM), Chairman Carl-Henric Svanberg said Thursday at the company’s annual meeting.
The settlement with the Plaintiff’s Steering Committee would resolve a “substantial majority of legitimate economic loss and medical claims,” according to BP. However, the London-based super major still faces claims made by the U.S. Department of Justice and other federal agencies, and it excludes securities and shareholder claims pending, as well as claims based solely on the deepwater drilling moratorium and the related permitting process.
BP plans to sell some of its stakes in older GOM fields as part of its ongoing divestiture program, CEO Bob Dudley told shareholders during the meeting. Pre-Macondo, BP was the biggest producer in the GOM, and it continues to be one of the biggest leaseholders.
No details were provided on what fields the company might be selling. In February BP sanctioned phase 2 of the Mad Dog spar platform, a project it operates, committing $1.8 billion to pre-operational drilling, and on Wednesday partner BHP Billiton ponied up $708 million (see Daily GPI, April 12).
“We are investing in exploration but divesting mature oil and gas fields that other companies can specialize in — such as in the southern North Sea and some fields in the Gulf of Mexico…The principle is to prioritize value over volume and quality over quantity.”
The GOM will remain a top priority, said Dudley.
“The large number of turnarounds and the temporary cessation in Gulf of Mexico activity did affect our production,” said the CEO. “But in October, as many operations came back onstream, production started to rise again and increased by 5% — or 170,000 boe/d — between the third and fourth quarters.
“Also in October we received our first permit since 2010 to drill a new well in the Gulf of Mexico, where we now have five rigs up and running.” Another three rigs are scheduled to be installed in the GOM by the end of the year, he said. Since beginning its asset divestitures in 2010, BP plans to sell a total of $38 billion in global properties by the end of next year. Since 2010, BP has sold $23 billion in assets worldwide, the CEO added.
“In the past we measured our success by barrels of hydrocarbons produced,” said Svanberg. “We now measure success on the value we generate for you, our shareholders. We have therefore taken a hard look at our portfolio, disposing what has a higher value to others, seeking to release value earlier in the life of our assets. We are playing to our strengths. BP has always been one of the great explorers. We’re now doubling our investment in exploration.
“It’s a sign of confidence in our abilities that we were awarded over 300,000 square kilometers of new exploration licenses last year, a record in BP’s history, unprecedented over recent decades.”
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