BP’s Santos basin oil and gas discovery in deep waters off the coast of Brazil is expected to play a significant role in the company’s plan to increase its oil and gas production to between 2.3 million to 2.5 million barrels of oil equivalent a day.
As part of BP's shift away from expanding in low-carbon energy alternatives, such as offshore wind, and back to fossil fuels, the Santos discovery - potentially the largest since its discovery at the Shah Deniz gas field in Azerbaijan in 1999 - marks the company’s 10th oil discovery of the year.
BP is now conducting further tests on the Santos discovery - beneath about 2,400 metres of water and 250 miles off the Brazilian coast - to gauge the potential of the oil and gas basin.
Gordon Birrell, the head of BP’s oil and gas production business, said the discovery underscores the company’s “commitment to growing our upstream” oil and gas production since abandoning plans to become a “net zero” energy company.
He added that Brazil was an important country for BP, which will explore the potential of establishing “a material and advantaged production hub in the country”.
Situated in coastal waters 404 kilometres from Rio de Janeiro in a water depth of 2,372 meters, the Santos basin is BP’s second discovery in Brazil this year.
In a stark turnaround from its former green agenda, BP has also announced oil and gas discoveries in Trinidad, Egypt, the Gulf of Mexico, Libya, Namibia and Angola.
The company has also started a new oil extension project in the Gulf of Mexico that should add an extra 20,000 barrels a day to its production.
With around 40 wells planned over the next three years, including as many as 15 to be drilled this year, BP will continue to ramp up its global exploration program.
What appears to have triggered BP’s about-face on renewables is a string of unforeseen hurdles.
The COVID pandemic triggered one of its worst financial results – a $5.7 billion loss for 2020 – since it reported a $4.9 billion loss for 2010 following the Deepwater Horizon oil spill.
Two years later, the company was forced to take a $25 billion hit after offloading its stake in the Russian oil company Rosneft after the Kremlin’s invasion of Ukraine.
During BP’s fateful net-zero fiasco, former CEO Bernard Looney was sacked from the company for failing to disclose to the board his relationships with his staff.
Last month, BP told the market it would sell its share in 10 U.S. onshore windfarms to the New York-headquartered LS Power.
However, last Monday the company launched its 50:50 offshore wind joint venture with the Japanese wind company Jera, worth up to £4.5 billion, which it plans to use to gain some access to zero-carbon wind energy developments while focusing on fossil fuels.
Shares in the company rose more than 1% on London's top-tier FTSE 100 index following the announcement.
