BP yesterday announced plans to spin out its onshore US oil and gas assets into a new wholly-owned business in an effort to improve the competitiveness of its shale gas portfolio there.
BP said a separate US shale business, headquartered at a new location in Houston, would be more competitive because it would have faster decision-making abilities and shorter cycle times from gaining access to drill through to production.
“The new business will remain a critical part of BP’s portfolio over the long-term,” BP chief executive Bob Dudley told a presentation in London yesterday, adding the creation of a “discrete, high quality” unit would give options for the future.
BP, Europe’s second-biggest oil company by stock market value, said in October it would sell £6billion worth of assets by the end of 2015, building on the £24billion of assets it sold to help pay for the 2010 Gulf of Mexico oil spill disaster.
The separate US business – in the “lower 48″continental US which excludes BP’s substantial portfolio off the coast – will consist of unconventional resources of around 7.6 billion barrels of oil. This includes BP’s stakes in the prolific Eagle Ford shale in Texas, BP said, adding it would start to disclose separate results for the new business from 2015.
“Our competitors are mostly smaller independents, they are nimble, the technology is rapidly developing especially in unconventionals, it’s a very broad piece of geography,” said a BP spokesman.
“We need to speed up the time from access to production, and look at our costs.
“By contrast, deepwater Gulf of Mexico needs the strength of companies like BP for the scale of the developments, and project management.”
The company also suffered a setback on Monday night when a US court decision against it hurt its efforts to limit payments over the spill.
It is expected losses from claims linked to the current US appeal court ruling are around £600million.
In a statement BP said it “disagrees” with the decision by the US Court of Appeals denying the company’s request for a permanent injunction preventing payments under the Economic and Property Damages Settlement.