- BP (LON:BP) (BP +1.3%) CEO Bob Dudley says his company's extension of an oil production sharing deal in Azerbaijan by 25 years is profitable at current oil prices.
- “Breakeven is below the current price of oil [$55/bbl Brent]... it is competitive in our portfolio, most certainly," Dudley says after the BP-led consortium and Azerbaijan signed a deal to continue developing the giant ACG offshore fields until 2050.
- The complete terms of the contract, which include cutting BP's stake in the project and a one-time $3.6B payment to the Azeri government, are not disclosed.
- The fields produce 585K bbl/day, accounting for 75% of Azerbaijan’s oil output, but production is expected to rise as the partners could invest as much as $32B over the next 32 years.
- Dudley also expects oil prices to hold at $50-$60/bbl, without big spikes up or down, saying “It was always going to take quite a while for stocks to come down. But for the OPEC and non-OPEC producer agreement, from everything we see, there is broadly compliance in place and stock levels are coming down."
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Original article