BP, Anadarko plan South China Sea gas venture

The area is believed to hold vast deep-water reserves of oil and gas.

By Trefis Feb 17, 2012 12:23PM
Image: Oil drilling platform (© Scott Gibson/Corbis)British Petroleum (BP), hit by falling output, is looking to begin exploration in blocks in the South China Sea.

BP has a strategic focus on deep-water resources around the world. The company received approval to begin exploration in a block in the South China Sea last week. BP will be exploring the 43/11 block in collaboration with Chinese company CNOOC and independent exploration company Anadarko Corp. (APC). Deep-water exploration is becoming an increasingly important source of new reserves for major oil companies.

 

The agreement between BP and the Chinese government to begin exploration of the 43/11 block was signed last year during Vice-Premier Li Keqiang's visit to the U.K. in January last year. The South China Sea is expected to hold vast deep-water reserves of oil and gas.


BP China's President Chen Liming hopes that drilling will begin by the end of this year, although he cautions that the exact date to start the work depends on a number of factors. BP already operates a gas production field in China called the Yacheng field and also holds interest in another deep-water block in the South China Sea.


BP Natural Gas Quantity Produced

BP will hold a 40.82% interest in the 43/11 block exploration project and will be the working partner. Anadarko holds a 50% stake, while the rest will be held by state-owned CNOOC. The venture will look to explore the block for natural gas and then take up further development.


BP is also focusing on deep-water exploration in the U.S. Gulf of Mexico and Angola, among other regions, to boost output figures. China is expected to increase its consumption of natural gas over the next few years to meet growing energy needs and to supplement coal as a cleaner alternative.


We have a $55 price estimate for BP, which is at a 25% premium to its current market price.


Tags: APCbp
0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

108
108 rated 1
257
257 rated 2
439
439 rated 3
626
626 rated 4
499
499 rated 5
530
530 rated 6
713
713 rated 7
522
522 rated 8
339
339 rated 9
136
136 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
UPLULTRA PETROLEUM Corp10
EOGEOG RESOURCES Inc10
SWNSOUTHWESTERN ENERGY COMPANY10
TAT&T Inc9
COPCONOCOPHILLIPS9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.