BP geared up for growth, CEO says

The UK-based energy giant and LNG player, BP said the company expects to see the growth of its major operating segments over the next five years.

During the presentation of the company’s business strategy for the next five years, group chief executive Bob Dudley, said that in the past six years, the company has been fundamentally reshaped and is now “fit for a fast-changing future.”

Over the next five years, BP expects growth in the Upstream sector to come from a continuing series of major higher-margin project start-ups, while the Downstream expects to deliver strong marketing-led growth.

BP intends to maintain its existing financial frame throughout the five years to 2021, with organic capital expenditure kept within a range of $15-17 billion a year and the target band for gearing remaining at 20-30 percent.

Brian Gilvary, BP chief financial officer, said, “last year we delivered our targeted $7 billion reduction in cash costs a year early, and capital spending was $8.6 billion lower than its peak in 2013.”

The company is expecting the cash balance point to drop to around $35-40 per barrel in 2021. Pre-tax cash flow in the Upstream and Downstream sectors is expected to grow to $13-14 billion and $9-10 billion, respectively, in 2021.

BP’s Upstream segment has begun production from 24 major projects, including six in 2016, while further seven projects are expected online during 2017.

A further nine projects that are expected to start up through 2018-2021 are already under construction.