BP announces Gulf of Mexico oil discovery

(Sharecast News) - BP announced a new oil discovery at its Far South prospect in the deepwater Gulf of Mexico on Monday, marking a potential boost to its upstream portfolio as the company accelerates exploration efforts under its revised strategic plan. The FTSE 100 energy giant said the Far South well, located in Green Canyon Block 584 roughly 120 miles off the Louisiana coast, was drilled to a depth of 23,830 feet in water depths of 4,092 feet.

BP said it holds a 57.5% operating interest in the project, with Chevron owning the remaining 42.5%.

Both the initial well and a sidetrack encountered oil in high-quality Miocene-aged reservoirs, and preliminary data indicates potentially commercial volumes.

Situated about four miles north of the Constellation field, the company said the discovery added to its track record in the region and reflected its commitment to expanding exploration in the US offshore.

The firm said it had made more than 40 discoveries globally over the past decade, including in Trinidad, Egypt, and the Gulf of Mexico.

BP said the find aligned with its February strategy update, which targeted growing global upstream production to between 2.3 and 2.5 million barrels of oil equivalent per day by 2030, with further potential beyond 2035.

The US onshore and offshore segments were expected to contribute around one million barrels of oil equivalent per day to that total by the end of the decade.

As part of its expanded exploration programme, BP said it planned to drill 40 wells globally over the next three years, including 10 to 15 in 2025.

"This Far South discovery demonstrates that the Gulf of America remains an area of incredible growth and opportunity for BP," said senior vice-president Andy Krieger.

"Our 'Gulf of America' business is central to BP's strategy," Krieger added, using the name applied to the Gulf of Mexico by US president Donald Trump that is not recognised internationally.

"We are focused on delivering more affordable and reliable energy from this region, building our capacity to over 400,000 barrels of oil equivalent per day by the end of the decade."

At 1025 BST, shares in BP were up 4.7% at 347.3p.

Reporting by Josh White for Sharecast.com.