RPT-BP to outline upstream growth strategy

Sun Dec 2, 2012 7:01pm EST

By Andrew Callus
    LONDON, Dec 3(Reuters) - BP will outline growth plans
for its oil and gas production arm on Monday in its first
strategy update since striking a series of deals aimed at
getting its Russian and U.S. operations back on track.
    Like all top investor-owned western oil firms, BP is
struggling to increase output and reserves in an era when
nations guard their resource wealth jealously, and spending ever
more billions of dollars to find new supplies and develop them.
    The United States and Russia contribute about half the
company's output.
    In the United States, and particularly the Gulf of Mexico,
the UK-based industry No. 4 by value became a pariah after its
2010 oil spill there. Although BP's U.S. offshore operations are
back to pre-spill levels, last month it pleaded guilty to
criminal misconduct and added a $4.5 billion penalty to the $23
billion the disaster has cost it.
    Investors expect the settlement will allow the company to
move on, but last week the U.S. government used BP's criminal
status to ban it from new federal contracts over its "lack of
business integrity." 
    Also last week, BP avoided bidding for Gulf of Mexico
leases, raising a new question mark over its plans for a
province where it is the main deepwater leaseholder, and which
accounted for much of its output growth plans in past strategy
announcements. 
    In Russia, where BP is more heavily invested than rivals, BP
has had disagreements with its 50-50 partners in TNK-BP
, privately-owned AAR. BP has also pursued new Russian
projects with the increasingly dominant state sector in the form
of deals with government-owned Rosneft.
    In October and November, it finally struck a series of deals
that allows it to exit TNK-BP, acquire a stake in Rosneft, and
begin talks about such projects. 
    Monday's strategy update comes hard on the heels of a Nov.
23 reorganisation of its oil and gas production management,
reversing a change it enacted after the spill. 
   The move puts Lamar McKay, currently head of BP's U.S.
operations, in charge of the upstream division, freeing up Chief
Executive Bob Dudley from close oversight of the day-to-day
operations he took over in the wake of the spill, which killed
11 men and spewed millions of barrels of crude into the sea.
    McKay, like Dudley, is a former executive from Amoco, the
company BP took over in 1997 to join the top tier of the
industry.
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