BP Approves $5B Offshore Project in Gulf of Mexico

Core Insights - BP is advancing with a $5 billion offshore drilling project in the Gulf of Mexico, expected to take five years to come online, with a production capacity of 80,000 barrels of oil per day by 2030 [1][2] - The project aims to enhance BP's US upstream output to over 1 million barrels of oil equivalent per day, contributing to a production target of 400,000 barrels of oil equivalent per day from the Gulf by 2030 [3] Company Strategy - The announcement reflects BP's commitment to rebuilding its oil and gas business in the US, following a strategic shift back to core competencies in oil and gas from renewables [2] - The Tiber and Guadalupe fields are estimated to hold recoverable resources of approximately 350 million barrels of oil equivalent [2] Competitive Positioning - BP aims to close the production gap with competitors Exxon Mobil and Shell, which have outperformed BP in shareholder returns in recent years [3] - The company is implementing cost-cutting measures, including a 5% workforce reduction, as part of a broader plan to achieve $500 million in cost savings by 2025 [4] Industry Context - The Gulf of Mexico's offshore oil production is projected to increase from 1.8 million barrels per day to 2.4 million barrels per day by 2027, driven by streamlined permitting processes and technological advancements [5] - Recent assessments indicate the Gulf holds 29.59 billion barrels of oil and 54.84 trillion cubic feet of gas in technically recoverable, undiscovered fields, with a 22.6% increase in estimated resources [6]