BP Cuts North Sea Production Costs In HalfDudley Credits Standardization

In a talk he gave last week at the Society of Petroleum Engineers Offshore Europe conference in Aberdeen, BP CEO Bob Dudley said his company has cut production costs by half in the North Sea.

“This focus on standardization, simplification and discipline on cost has contributed to our average production costs in the North Sea coming down from a peak of over $30 a barrel in 2014, to less than $15 a barrel today. Heading towards 2020, with all our major new developments coming into production, we expect that to come down below $12 a barrel in the North Sea,” the BP chief executive said.

Dudley was opening plenary’s keynote speaker at the European E&P conference. His talk was entitled “New realities — reinventing our industry.” He talked about how the energy industry is changing.

Dudley referred to an innovation his company is focusing on as “the type of businesses we develop in the future, and the shape of future business models.”

The fuel mix is changing

“Oil and gas will be a big part of the mix for decades to come. But the fuel mix is changing, along with the way resources are produced and delivered as we move to lower carbon and look to advance that transition.

Dudley said the BP portfolio is shifting towards more gas “as we put together the right projects.”

Promotes biofuels

Dudley said BP was continuing its work in developing renewables, “particularly … in terms of ‘bio’ for fuels and feedstocks. We recently acquired a joint venture facility in the U.S. that will help with the commercialization of biobutanol.”

Dudley said BP is very focused on using venturing “to screen for and test new emerging technologies in the area of lower carbon.”

“It’s an environment with opportunities for the most efficient and competitive producers – and for producers of more efficient products, like fuels and lubricants that offer more miles per liter or a higher bio-content that lowers the carbon footprint.”

BP reports full ownership of three ethanol production plants in Brazil with combined capacity of 10 million tons per year. On the oil and petrochem side, BP’s share of the oil refining operations it owns or participates in comes to just under 2 million barrels per day.