Tangguh LNG facility in Papua Barat, Indonesia
Tangguh LNG facility in Papua Barat, Indonesia

bp profits halve despite LNG and biogas growth

bp’s profits halved to $13.8bn in 2023 on the back of lower energy prices though resilience in the gas sector helped support the multinational energy group’s overall business.

Its LNG portfolio rose 4 Mtpa to 23 Mtpa, biogas supply and production volumes increased 80% and 18% respectively, while its hydrogen pipeline grew to 2.9 Mtpa, up from 1.8 Mtpa in 2022.

Yet gas wasn’t immune to wider commercial pressures, with total adjusted EBITDA for gas and low-carbon energy totalling $14.76bn in 2023, down from $21.07bn in 2022, while in the fourth quarter 2023 it totalled $3.4bn, down from $4.5bn year-on-year. Overall fourth quarter profit totalled $3bn.

Murray Auchincloss, hosting bp’s first results as CEO, said 2023 was a year of strong operational performance with real momentum in delivery across the business.

“And as we look ahead, our destination remains unchanged – from International Oil Company (IOC) to Integrated Energy Company (IEC) – focused on growing the value of bp. We are confident in our strategy, on delivering as a simpler, more focused and higher-value company,” he said.

“With hydrogen, our focus this decade is on blue hydrogen and decarbonisation of our refineries, while laying the foundation for green hydrogen production towards the end of the decade.”

On 5 December, bp announced the restructuring of the ownership and commercial framework of the Atlantic LNG joint venture with its partners Shell and the National Gas Company of Trinidad & Tobago.

The restructuring helps provide the certainty required for sanctioning the next wave of upstream gas projects and secures the long term LNG equity offtake for shareholders including bp.

Last month the government of the Republic of Senegal approved bp’s exit from the Cayar Offshore Profond production sharing contract and designation of Kosmos Energy as the Operator of the Yakaar-Teranga gas resource.

In November, bp signed a nine-year sales and purchase agreement (SPA) with State-owned Oman LNG to buy one million Mtpa of LNG starting 2026, and production began on the Seagull oil field in the North Sea, which is expected to produce 50,000 boe gross per day at peak production.

The first LNG cargo produced by the new third liquefaction train at the Tangguh LNG facility, in Papua Barat, Indonesia, was loaded in October (pictured).

bp’s renewables pipeline increased to 58.3 GW, up from 37.2 GW in 2022.

During the quarter, it secured US Department of Energy funding confirmation for the MachH2 Hub hydrogen project in the US Midwest, and bp and Equinor signed an agreement under which they will restructure their investments in their US offshore wind projects.

Subject to approvals, bp will assume full ownership of the Beacon projects and Equinor the Empire projects. bp will independently pursue future US offshore wind opportunities.

In November, bp agreed to acquire the remaining 50.03% of Lightsource bp, one of the leading developers and operator of utility-scale solar and battery storage assets, with 1,200 employees in 19 countries.

The acquisition includes LSbp’s hopper of 38GW renewables pipeline and an additional 25GW of early stage opportunities. The transaction is expected to close in the second half of 2024, subject to regulatory approvals.

Last month bp bought GETEC Energie, a leading independent supplier of energy to commercial and industrial customers in Germany (click here).

For 2024 and 2025, bp is budgeting capital expenditure of around $16bn per year.

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