BP has started pumping crude through a new $9bn offshore platform in the oil-rich US Gulf of Mexico as it slows its transition out of fossil fuels amid growing energy security fears.
The company said on Thursday that it had started producing oil through the Argos deepwater platform, its biggest new project in the region in more than a decade, which is capable of pumping 140,000 barrels a day of oil and gas from fields under thousands of feet of water.
Bernard Looney, BP’s chief executive, said bringing Argos online showed that the company was “investing in today’s energy system”. It would strengthen the company’s position in the Gulf of Mexico, where it is the largest producer, “for years to come”, he added.
The field’s start-up comes at a pivotal time for BP after Looney in February scaled back ambitious plans to shift the oil supermajor out of fossil fuels.
Looney announced then that the company would trim its oil and gas output by 25 per cent by 2030, compared with a previous target of 40 per cent, saying that governments wanted BP to continue investing in fossil fuels. Investors had also questioned the previous strategy, arguing that a shift into renewable energy would diminish returns.
US president Joe Biden has leaned on the domestic oil and gas industry to increase oil output after fuel prices spiked to record highs last year when Russia’s full-scale invasion of Ukraine sparked fears that global oil supply would fail to keep up with growing demand.
Starlee Sykes, head of BP Gulf of Mexico business, told the Financial Times in an interview that the company had responded to Biden’s call and planned to continue exploration for new oil and gasfields in the Gulf of Mexico.
The Argos platform will raise its production capacity in the region to 400,000 b/d, about 20 per cent of the company’s total output.
“The Gulf of Mexico has some of the best barrels we’ve got and we want to explore and develop more,” Sykes said.
BP also sees the potential to continue expanding output in the region for decades to come, she added, despite a goal of reaching net zero emissions by 2050.
“It’s massively prolific . . . there’s still a long, long way to go in the Gulf,” said Skyes.
The new Argos platform is the first new platform the company has deployed in the region since the Deepwater Horizon explosion in April 2010 that killed 11 people and unleashed the worst offshore environmental disaster in US history.
It comes amid heightened concerns that shortfalls in global oil supplies could lead to a fresh spike in crude prices later this year, a threat to a global economy reeling from high inflation.
Such fears were exacerbated when the Opec+ group of producers said earlier this month that it would cut more than 1mn b/d of output.
