BP to form separate business to manage onshore assets in U.S. Lower 48

BP has announced its intention to establish a separate business to manage its onshore oil and gas assets in the U.S. Lower 48.

The U.S. Lower 48 onshore oil and gas business environment has unique characteristics. Responding to these, the new business will operate separately from the rest of BP and will be designed to adapt to the rapidly changing and hyper-competitive energy landscape in the region. This move is expected to help unlock the significant value associated with BP’s extensive resource position in the U.S. Lower 48 onshore, which BP currently oversees through its Houston-based North America Gas group.

“Over the last few years, we have fundamentally reshaped our North America Gas portfolio,” said BP Upstream Chief Executive Lamar McKay. BP has done so by divesting non-core assets and focusing development in leading U.S. unconventional plays like the Eagle Ford shale in South Texas. “Now it’s time to reshape the way we run the business—and we are very excited about this bold step forward,” he said.

BP will own the new U.S. Lower 48 onshore business. But the business will be led by a separate management team and be housed at a new location in Houston, apart from BP’s Westlake campus. It will have separate governance, processes and systems designed to address the unique competitive and operating environment in the U.S. Lower 48 onshore. BP is expected to begin disclosing separate financials for the new business in 2015.

These changes are chiefly intended to improve competitiveness of the U.S. Lower 48 onshore business through greater speed of innovation, faster decision-making and shorter cycle times from access through to production, together with more efficient cost management.

The changes to BP’s U.S. Lower 48 onshore business are consistent with the group’s strategy of delivering value over volume. BP also believes these moves will enhance efforts to develop industry-leading technology that will be a critical part of BP’s global strategy in unconventional oil and gas resources going forward.

“Participating in the U.S. Lower 48 onshore is key to our upstream strategy because we believe the region will remain at the forefront of innovation and drive global learning in unconventional resources,” McKay said.

The approach BP intends to pursue for its U.S. Lower 48 onshore business is specifically designed in response to the unique business environment in the region. Much of what BP does in other onshore regions around the world will continue to rely on the scale, capital, technology and project management capabilities that only a major international oil company can provide.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

FERC to issue environmental assessment for Dominion Cove Point LNG export project on May 15

Dominion reported that Federal Energy Regulatory Commission (FERC) will issue its Environmental Assessment for the Dominion Cove Point LNG liquefaction and export project on May 15.

"We are pleased to reach another important milestone in the development of a project that has very significant economic, environmental and geopolitical benefits," said Diane Leopold, President of Dominion Energy. "Dominion is dedicated to constructing a safe, environmentally compatible and reliable export facility that will be an asset to the community, state and country.

"The proposed export facility will be within the 131-acre footprint of the LNG import facility, which has been in Calvert County for 40 years. No new pipelines, storage tanks or piers are needed at the facility. The company needs about 50 permits and approvals before construction can begin.

Dominion filed notice for the pre-filing process with the FERC in June 2012 that it was planning to add export capability at its Cove Point terminal in Lusby MD in Calvert County on the western shore of the Chesapeake Bay.

The FERC has been researching and analyzing the application since then. Dominion filed the application in April 2013 and it now totals more than 21,000 pages.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

EU environmental impact assessment rules to trigger more competitiveness, growth

A recent European Parliament vote on new environmental impact assessment rules is a step forward in making Europe more competitive without compromising on the environment, according to the International Association of Oil & Gas Producers (OGP).

“While not imposing unnecessary requirements on the upstream oil and gas industry, the new rules will guarantee that any development, including exploration for shale gas, will be subject to strict environmental standards,” said Roland Festor, OGP’s director for EU affairs.

The new rules confirmed the existing differentiation between exploration and production of hydrocarbons. It will ensure that the requirements for environmental protection become more stringent as a project progresses. This way, time and resources will be applied where they matter: on full environmental studies, once a project’s economic potential is confirmed and its development is going ahead.

Too many detailed requirements during the early phase of exploration - when commercial viability of a project is totally uncertain and operations limited - would have undermined key investments, without bringing any additional benefit to the environment.

“The vote is a positive first step in enabling the assessment of domestic energy resources. Opportunities, such as natural gas from shale, must be explored and, if promising, will be crucial to encourage future economic growth and create new jobs,” said Festor.

“Shale gas exploration is even more crucial now that the EU is devising its 2030 climate and energy policy. Gas is the best resource Europe has - cleaner-burning, reliable and immediately available - to help meet EU emissions reduction targets quickly and at a competitive cost versus alternatives,” he explained.

Shale gas development could have other significant benefits for Europe. According to a recent study from consulting and engineering firm Poyry, domestic EU development could create as many as 1.1 million jobs by 2050, while reducing the region’s dependence on energy imports and relatively lowering prices.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.