BP: Deepwater Investments in GOM Make Sense
This year’s Offshore Technology Conference kicked off with a breakfast keynote from Richard Morrison, BP plc’s regional president for the Gulf of Mexico.
He outlined how BP was able to adapt in order to continue to operate efficiently in deepwater Gulf of Mexico.
Despite the low oil price environment during the oil and gas industry downturn, operational safety didn’t suffer, said Morrison, adding that there hadn’t been an increase in accidents in the Gulf of Mexico or elsewhere within the company.
“The economics for deepwater investments make as much sense today as they did in 2001,” Morrison said.
BP implemented measures to manage costs, which included cutting its Gulf of Mexico workforce by half since 2014. Its production in the Gulf of Mexico increased 15 percent, while production costs have decreased by 35 percent for the last three years.
“BP has rebalanced the cost and revenue equation, so that our Gulf of Mexico free cash, breakeven point is less than $40 per barrel,” said Morrison.
And while Morrison believes regulations are good and necessary, he said regulations should have flexibility.
“The regulatory environment is prime for modernization and I want the industry and regulators to work together to modernize offshore regulations,” he said.
When it comes to the Trump administration’s new tax reform proposals, Morrison is optimistic.
“It’s got to be good. If it spurs growth, helps suppliers and helps the supply chain, it can only be better,” he said. “Still, I’ll believe it when I see it.”
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