British supermajor BP has put forward plans to ramp up capital expenditure in the coming years in a portfolio radically changed by its deal with Rosneft and post-Macondo sell-off programme.
In a fresh presentation to investors in the UK, BP chief executive Bob Dudley and chief financial officer Brian Gilvary said that the company was now aiming
to spend between $24 billion and $27 billion annually on capital expenditure
between 2014 and 2020.
The British supermajor targeted hiking its cash flow by 50%
to more than $30 billion by 2014 when compared to 2011's $18.5 billion levels, and vows that unit operating cash margin of
new upstream projects would be double that of the 2011 average.
The company is to continue recent efforts to take aim at
fewer, higher-margin upstream plays, with a particular emphasis on deep-water
oil plays including Angola, Azerbaijan, the US Gulf of Mexico and the North
It targeted spending more than half its capital expenditure
on these plays in the coming years.
While the company’s original $38 billion divestment plans
lie near-complete at $37 billion worth of assets sold, BP said it planned to
continue to make divestments worth $2 billion to $3 billion in the coming years.
In recent weeks it has been forced to add $3.85 billion to
its Macondo fund under a plea deal on criminal charges related to the disaster and still faces a potentially costly civil trial over the 2010 spill in
February next year.
BP has also sought to put Rosneft’s mammoth deal to take
control of TNK-BP in context, pointing out the vast reserve potential offered
by its newly-increased 19.75% stake in the Russian state player as a result of the sale now expected to complete in the first half of 2013.
The British explorer said an integration plan was in the
works to create synergies with Rosneft in multiple areas including joint
developments and integrated supply solutions in a general drive toward cost and
BP said that in addition to providing process and technical
support to the Russian oil player at brownfield and greenfield sites around
Russia, the exploration pair would look to create international upstream
ventures together as well.