BP is preparing to increase its natural gas production in the U.S. as a response to the recent surge in domestic gas prices, according to CEO Murray Auchincloss. Speaking at the CERAWeek conference in Houston, Auchincloss highlighted the significance of the Haynesville basin in eastern Texas, stating, “With rising gas prices, the time has come for the Haynesville.”
In the past year, benchmark U.S. natural gas prices have more than doubled, currently hovering around $4.4 per million British thermal units (mmBtu).
This increase has been fueled by the ramping up of new liquefied natural gas (LNG) export terminals along the Gulf Coast. Last year, BP’s onshore U.S. shale operations produced 434,000 barrels of oil equivalent per day, with 264,000 boepd of that being natural gas, primarily linked to crude oil production.
Currently, BP operates two rigs in the Haynesville basin compared to four rigs each in the oil-rich Permian and Eagle Ford basins. The company holds 5.5 billion cubic feet of natural gas reserves in the U.S. onshore shale.
In a recent strategic shift, Auchincloss announced plans to cut investments in renewable energy and increase annual spending on oil and gas to $10 billion, aiming to enhance earnings and regain investor confidence. Looking ahead, BP aims to elevate its oil and gas production to between 2.3 million and 2.5 million boepd by 2030, abandoning earlier plans to reduce output in the decade.
Auchincloss emphasized the vital role the U.S. will play in this renewed focus, alongside the Middle East. Additionally, BP has recently approved the development of the Kaskida oilfield in the Gulf of Mexico and intends to proceed with a second Paleogene development, known as Tiber, later this year.
Auchincloss noted the vast potential in the Gulf, stating, “We have a fabulous position here in the Gulf of America.”