LONDON, Aug. 5 (UPI) — Though the global energy sector is crimping available revenue streams, BP said Wednesday it planned billions of dollars of spending in the North Sea.
“These are challenging times for the industry and we are having to make hard choices,” BP North Sea Regional President Trevor Garlick said in an emailed statement. “Nonetheless, we remain committed to improving the competitiveness of the North Sea and to maximizing economic recovery from our fields.”
BP in a quarterly earnings report released last week said it lost $5.8 billion, which in part was a reflection of the July 2 settlement reached to resolve claims associated with the oil spill in the Gulf of Mexico in 2010. The British company said it earned $228 million from oil and gas exploration, compared with $4 billion year-on-year, reflecting the long slump in crude oil prices.
Garlick said Wednesday the company was setting aside $1 billion for development of its Eastern Trough Area Project in the North Sea, ensuring the project remains viable for the next 15 years.
“ETAP holds significant potential and we are working to ensure its reliability, efficiency and long-term competitiveness,” he said. “This project will secure the future of the field until 2030 and beyond.”
Chief Executive Officer Bob Dudley remained optimistic about future prospects in the oil sector, saying his company was positioned well to weather the storm. Crude oil prices are down about 50 percent from last year, leaving companies with less capital to invest in future oil and natural gas production.
After several years of declines and escalating costs, production from the North Sea is set for a rebound.
In early 2015, industry body Oil & Gas U.K. said the market situation was “bleak.” It reversed course somewhat this week, saying in a report that offshore production in the region could be 2.5 percent higher year-on-year.
Deirdre Michie, the group’s chief executive officer, said the investment commitment from BP was welcome news for the industry.
“Given the harsh business environment upstream oil and gas companies currently face, with the oil price more than halved since this time last year, industry as a whole is putting a great deal of effort into improving the performance of its assets,” she said in a statement.
A budget plan outlined in March by the government was designed to boost exploration for new oil and gas reserves in British territorial waters.
