BP CEO sees Tiber FID following Kaskida within a year

BP will take a final investment decision to develop the 4bn-6bn bl Tiber oil field in the US Gulf of Mexico within 12 months, its chief executive Murray Auchincloss said today.

This will follow today's go-ahead for BP's 80,000 b/d Kaskida project. Both fields are in the Gulf of Mexico's Paleogene play.

"Mid-next year we think we'll be sanctioning Tiber. It'll pretty much be a photocopy of Kaskida as well for capital productivity," Auchincloss said on BP's second-quarter earnings call, referring to a strategy of utilising existing platform and subsea equipment designs that can be replicated at low cost for successive projects.

"10bn bl of discovered resource in the basin has now been highly developed by other companies," Auchincloss said. "It's time for us to catch up with that. We've used an industry standard solution for Kaskida. It'll produce at 80,000 b/d. It'll be less than $5 billion." A first phase of development will begin producing in 2029, according to BP.

Kaskida will deliver "at least" 275mn bl, said Auchincloss, but he said BP's upstream team thinks it might do much better than that.

"We have 1,000ft of pay, and the average across the rest of the Paleogene is 500ft of pay. So, it's an enormous column of oil," he said.

The first phase of Kaskida will focus on the east of the field, and BP plans to appraise the western side next year. The company has further exploration wells around Kaskida and Tiber that it is planning. After appraisal and exploration drilling is completed in 12-18 months' time, Auchincloss said the company would consider whether to bring in a partner.

"Kaskida alone will be a 5pc increase in [BP's] operating cash flow when it comes in, at group level," he said. "5pc alone. And Tiber will follow that as well."

Earlier today, BP said it would raise its dividend by 10pc after reporting a 29pc jump in its second-quarter cash flow for the second quarter.

By Jon Mainwaring