Despite JV Reports, BP Focused on Organic Growth Not M&A鈥擟EO

BP remains focused on its transformation into an integrated energy company, interim CEO Murray Auchincloss said during a quarterly webcast, ruling out M&A for now despite reports the company was seeking joint venture partners.

Pietro D
Pitts
Hart Energy

BP remains focused on its transformation into an integrated energy company, interim CEO Murray Auchincloss told analysts during the company鈥檚 third quarter 2023 webcast. Throwing cold water on a Reuters report that BP was seeking joint ventures in the Eagle Ford and Haynesville shales, Auchincloss said the plan was to grow production organically, ruling out M&A for now.

Auchincloss said BP has a 鈥済reat portfolio鈥� in the U.S. with 鈥済reat resources鈥� to be developed by its U.S. upstream subsidiary BPX Energy without a need for more acreage.

鈥淲e will consider countercyclical moves,鈥� Auchincloss said. 鈥淏ut we're very, very happy with our position in the U.S., and we just need to organically develop that now.鈥�

RELATED: Analysis: How Chevron鈥檚 Hess Deal Boosts LatAm Position

Auchincloss said BP had capacity to grow organically between 2023-2025, and reiterated the company鈥檚 view on inorganic growth in the aftermath of recent mega acquisitions announced by its U.S. peers Exxon Mobil and Chevron to acquire Pioneer Natural Resources and Hess Corp., respectively.

鈥淪o those inorganic [opportunities] that we were thinking about, we're just going to pass on those for now,鈥� Auchincloss said. 鈥淪o, we're really focused on organically driving shareholder value for our shareholders. So 鈥� M&A is really not on our minds, if I'm honest.鈥�

Permian, other U.S. onshore advances

BP executives said the company started up Bingo, BPX鈥檚 second major central processing facility in the Permian Basin during the quarter, which will allow the company to double its oil and gas processing capacity there.

BPX began operating as a standalone entity in 2015. BPX comprises BP鈥檚 onshore oil and gas operations in the Lower 48 and operates in the Permian鈥檚 Delaware Basin and Eagle Ford in Texas as well as the Haynesville in Texas and Louisiana. BPX is focused on producing high-margin barrels while driving down emissions, BP said.

Elsewhere in the U.S., BP executives said the company continued its pivot to transition growth engines in the biofuels space with Archaea Energy and the 鈥渇irst Archaea Modular Design renewable natural gas plant now online in Medora, Indiana, underpins confidence in [the company鈥檚] expansion plans going forward.鈥�

On development of hydrogen, BP executives said the company has been selected by the U.S. Department of Energy to develop a regional clean hydrogen hub in the Midwest.

RELATED

Bingo: BPX Targets Summer Start for Permian Processing Facility

U.S. offshore wind

BP鈥檚 efforts related to wind energy offshore New York in the U.S. haven鈥檛 gone exactly according to the U.K. company鈥檚 plans.

The company鈥檚 request to renegotiate its power purchase agreements with New York was rejected in June, which forced the company to take a $540 million pre-tax impairment charge, BP interim CFO Katherine Thomson said during an earnings webcast with analysts.

鈥淟ooking forward, well, we'll need to see how circumstances evolve and continue to run our typical processes,鈥� Thomson said.

鈥淲e'll work with our partners closely on the way forward. As you'd imagine us to say 鈥� those decisions will be based on value,鈥� Thomson added. 鈥淲e need to see those projects continue to meet a 6% to 8% unlevered return, which is what we've been clear on with regard to offshore wind and our requirements. So let's see how it evolves.鈥�

Auchincloss reiterated that BP has really focused on integration in the offshore wind space. He said the company was taking electrons in the U.K. and Germany and providing them to the rest of the company鈥檚 businesses.

鈥淸We鈥檙e] focused much more on the integrated opportunities that we see in Europe. And that's why you didn't see us bid in many of the offshore wind rounds in the U.S. over the recent quarters,鈥� Auchincloss said.

Auchincloss also said BP was focused on trying to understand a 10-point plan recently released by the state of New York.

鈥淭he U.S. is a bit sticky right now with rising interest rates and power prices aren't quite converging with those,鈥� Auchincloss said. 鈥淏ut by and large, across Europe and Asia, we see those as working out.鈥�

原文链接/hartenergy

Despite JV Reports, BP Focused on Organic Growth Not M&A—CEO

BP remains focused on its transformation into an integrated energy company, interim CEO Murray Auchincloss said during a quarterly webcast, ruling out M&A for now despite reports the company was seeking joint venture partners.

Pietro D
Pitts
Hart Energy

BP remains focused on its transformation into an integrated energy company, interim CEO Murray Auchincloss told analysts during the company’s third quarter 2023 webcast. Throwing cold water on a Reuters report that BP was seeking joint ventures in the Eagle Ford and Haynesville shales, Auchincloss said the plan was to grow production organically, ruling out M&A for now.

Auchincloss said BP has a “great portfolio” in the U.S. with “great resources” to be developed by its U.S. upstream subsidiary BPX Energy without a need for more acreage.

“We will consider countercyclical moves,” Auchincloss said. “But we're very, very happy with our position in the U.S., and we just need to organically develop that now.”

RELATED: Analysis: How Chevron’s Hess Deal Boosts LatAm Position

Auchincloss said BP had capacity to grow organically between 2023-2025, and reiterated the company’s view on inorganic growth in the aftermath of recent mega acquisitions announced by its U.S. peers Exxon Mobil and Chevron to acquire Pioneer Natural Resources and Hess Corp., respectively.

“So those inorganic [opportunities] that we were thinking about, we're just going to pass on those for now,” Auchincloss said. “So, we're really focused on organically driving shareholder value for our shareholders. So … M&A is really not on our minds, if I'm honest.”

Permian, other U.S. onshore advances

BP executives said the company started up Bingo, BPX’s second major central processing facility in the Permian Basin during the quarter, which will allow the company to double its oil and gas processing capacity there.

BPX began operating as a standalone entity in 2015. BPX comprises BP’s onshore oil and gas operations in the Lower 48 and operates in the Permian’s Delaware Basin and Eagle Ford in Texas as well as the Haynesville in Texas and Louisiana. BPX is focused on producing high-margin barrels while driving down emissions, BP said.

Elsewhere in the U.S., BP executives said the company continued its pivot to transition growth engines in the biofuels space with Archaea Energy and the “first Archaea Modular Design renewable natural gas plant now online in Medora, Indiana, underpins confidence in [the company’s] expansion plans going forward.”

On development of hydrogen, BP executives said the company has been selected by the U.S. Department of Energy to develop a regional clean hydrogen hub in the Midwest.

RELATED

Bingo: BPX Targets Summer Start for Permian Processing Facility

U.S. offshore wind

BP’s efforts related to wind energy offshore New York in the U.S. haven’t gone exactly according to the U.K. company’s plans.

The company’s request to renegotiate its power purchase agreements with New York was rejected in June, which forced the company to take a $540 million pre-tax impairment charge, BP interim CFO Katherine Thomson said during an earnings webcast with analysts.

“Looking forward, well, we'll need to see how circumstances evolve and continue to run our typical processes,” Thomson said.

“We'll work with our partners closely on the way forward. As you'd imagine us to say … those decisions will be based on value,” Thomson added. “We need to see those projects continue to meet a 6% to 8% unlevered return, which is what we've been clear on with regard to offshore wind and our requirements. So let's see how it evolves.”

Auchincloss reiterated that BP has really focused on integration in the offshore wind space. He said the company was taking electrons in the U.K. and Germany and providing them to the rest of the company’s businesses.

“[We’re] focused much more on the integrated opportunities that we see in Europe. And that's why you didn't see us bid in many of the offshore wind rounds in the U.S. over the recent quarters,” Auchincloss said.

Auchincloss also said BP was focused on trying to understand a 10-point plan recently released by the state of New York.

“The U.S. is a bit sticky right now with rising interest rates and power prices aren't quite converging with those,” Auchincloss said. “But by and large, across Europe and Asia, we see those as working out.”