After years of stalled growth, British oil major BP will bring more projects online this year than any in the company’s history, CEO Bob Dudley said on Tuesday.
BP will finish seven “massive” projects around the world in 2017, Dudley said, from Egypt to the Gulf of Mexico. In 2011, the company had 8 million man-hours of work on projects under construction around the world, he said. This year, BP will log 88 million man-hours.
Dudley said BP has been quietly retooling in recent years, as it worked to recover from the 2010 explosion of the Deepwater Horizon drilling rig off the coast of Louisiana, which killed 11 workers and spewed millions of gallons of crude oil into the Gulf.
Last year, a federal judge approved BP’s $20.8 billion environmental settlement with the Justice Department, wrapping up the main civil case in the disaster.
“We’ve had our own special problems over the last six or seven years,” Dudley told industry leaders gathered for the CERAWeek conference downtown at the Hilton Americas-Houston. The company had to sell $55 billion in assets, including prime land in West Texas’ Permian Basin, to cover the settlements.
The two-year-old crash in crude prices then forced BP, among others, to stop or slow big projects. CERAWeek last year had a somber tone, Dudley said. “I don’t think I heard anybody laugh about anything last year,” he said. “It was a very serious group.”
But as the crash stretched out, oil companies began cutting costs, squeezing contracts and finding efficiencies. Dudley called it a “really tough re-wrenching of the cost structure.”
Some of those savings will go away as oil prices rise and contractors try to recapture profits. But some will stick, Dudley said, as companies and contractors work through strategic relationships.
“It feels like we’re heading into a balance point here,” he said.
Cost estimates for BP’s projects scheduled to come online this year, he said, are coming in under budget.
The company said the new projects will add 1 million barrels of oil and gas per day to BP’s production totals by 2021.