BP has been mired in crisis since 2010's Deepwater Horizon disaster in the Gulf of Mexico. Some of the turmoil has been of its own making, some has haunted the entire sector.
After $75bn worth of disposals in the wake of the spill and its costly clean up, the company no longer resembles the oil major of old. The journey to this point has been arduous for many reasons: BP managed to get off its knees only to be knocked down again by a collapse in the oil price in 2014. Efficiency and productivity became its new watchwords alongside safety and reliability.
After completing a series of deals in the past few weeks, a new BP is starting to take shape and it is one that is keen to grow. Yesterday, it acquired an almost two thirds stake in Kosmos’ exploration blocks in Mauritania and one third of its Senegal exploration blocks, together forecast to hold some 50 trillion cubic feet of natural gas. BP has also agreed a $2.4bn deal to buy a stake in Abu Dhabi’s largest oilfields, snapped up a 10 per cent share of Egypt’s giant Zohr field for $375m, and signed off a $9bn expansion of the “Mad Dog” deepwater oilfield in the Gulf of Mexico.
The deals point to the future pillars of a future BP. After asking itself difficult questions such as “Who are we?” and “Where do we want to go?”, there is more focus on gas and lower cost oil.
Another big focus for the oil company remains cost control, right down to the amount spent on wifi on its oil platforms. Such is the world of $50 oil versus the days of $100 oil, insiders say.
However, there is one area where shareholders seem keen to cut costs: the £14m pay package of BP CEO Bob Dudley. As the company emerges from crisis, such a payout may not be justified for much longer. Shareholders have already made their views known on the subject, with almost 60 per cent voting against the pay package earlier this year. BP may be hoping a 39 per cent rise in the share price this year, partly fuelled by Opec's planned production cuts, is enough to mollify them. But some investors still feel it would be wiser to curb Dudley's future awards.