BP Makes Big Q1 Loss, As Prices Crater
BP made a first quarter net loss of $583mn, compared to a net profit of $2.6bn in Q1 2015, the UK-based oil major reported on April 26. Low oil and gas prices were a major factor.
But the result also included a net non-operating charge of $896 million in Q1 2016 -- more than double its year-ago figure – primarily due to $1.1bn costs in the latest quarter relating to its Macondo oil spill six years ago in the US Gulf of Mexico.
BP’s underlying replacement cost figure was a profit of $532mn, down from $2.58bn in Q1 2015, although up from $196 million in Q4 2015.
Overall equity oil and gas production, including its share in Rosneft, was 3.5mn barrels of oil and gas equivalent a day (mn boe/d). Excluding Rosneft, it was 2.4mn boe/d, 5.2% up on a year earlier.
That included 5.91bn ft3/d gas production worldwide in Q1 2016, down 3% from 6.09bn ft3/d in Q1 2015. In the latest quarter, the US produced 1.6bn, Europe 0.29bn and the rest of the world 4.02bn ft3/d.
BP’s average realised prices for gas per mn Btu in Q1 2016 were $1.57 in the US, $4.30 in Europe, and $3.31 in the rest of the world; respective Q1 2015 prices were $2.39, $7.32 and $5.05.
Among key events in Q1 2016, BP singled out the mid-February start-up by In Salah Gas, a joint venture between Sonatrach (35%), BP (33%) and Statoil (32%), of its Southern Fields expansion project in Algeria; it did not cite the field’s one-day shutdown in mid-March due to a terror attack that caused no casualties or significant damage. Neither BP nor Statoil have said whether its staff, pulled out in the aftermath, have yet returned to its Algerian desert gas facilities.
It also noted the gas-condensate discovery by Eni at Nooros East prospect in Egypt, in which BP has a 25% stake, now tied it back for production through Abu Madi 25 km away.
BP signed its first shale gas production sharing agreement in China on March 31; the Neijiang-Dazu block in Sichuan covers 1,500 km2; CNPC will be the operator. The previous day it signed an unrelated but wide-ranging agreement with Kuwait Petroleum. In mid-February BP also signed an agreement to extend the major Khazzan tight gas licence in Oman.
BP also noted that condensate production started at the Exxon-operated Point Thomson project in northern Alaska this month. It actually began on April 22, according to Exxon, which noted that all gas is being re-injected in the medium to long term. Exxon though said it demonstrates its commitment to developing huge volumes of Alaskan North Slope gas. The eventual monetisation route in the 2020s will be LNG exports. BP's share in the project is 32%.
Mark Smedley