Despite its plans to transition to more green energy generation, BP has announced it intends to invest more in oil and gas operations in the Middle East.
BP already has a strong basis in the region, with it operating Iraq’s Rumalia oil field, which produces some 1.4 million barrels per day (bpd) – to put this into context, it is more than the entire UK oil industry. It also has a strong presence in Oman and the United Arab Emirates.
The recent plan that BP announced to cope with the energy transition will involve it scaling back its oil production while ramping up renewable energy production. It will remain a substantial oil producer, as crude oil will still be needed as feedstock for the petrochemicals industry, such as to make industrial Castrol products like cutting fluid and hydraulic oil.
The intention to invest in the Middle East would seem to fit with its aim of focusing hydrocarbon production on the most lucrative prospects. The Middle East still holds 73% of the world’s oil reserves, and the region has strong appeal in terms of production efficiency and low operating and capital costs.
Once oil demand returns and production quotas are relaxed, BP hopes to eventually get the Rumalia field to a peak production of 2.1 million bpd. It is also looking to invest more in its gas fields in Oman, so the fields can achieve maximum production of 1.5 billion cubic feet per day by early 2021.