BP has started pumping crude through a new $9bn offshore platform in the oil-rich US Gulf of Mexico as it slows its transition out of fossil fuels amid growing energy security fears.

The new Argos platform is the first the company has deployed in the region since the Deepwater Horizon explosion in April 2010, which killed 11 people and unleashed the worst offshore environmental disaster in US history.

The massive new deepwater oil project’s start-up comes at a pivotal time for BP after chief executive Bernard Looney said in February it was slowing its retreat from fossil fuels. The strategic shift underscores the pressure on BP and its industry as they face investor demands to stick with high-returning fossil fuel projects while responding to international efforts to slash carbon emissions.

Looney said that bringing Argos online showed that the company was “investing in today’s energy system”. It would strengthen the company’s position in the Gulf of Mexico, where it is the largest producer, “for years to come”, he added. Looney in February announced that the company would trim its oil and gas output by 25 per cent by 2030, compared with a previous target of 40 per cent, saying that governments wanted BP to continue investing in fossil fuels to ensure adequate supply.

Many investors had also questioned the previous strategy, arguing that a shift into renewable energy would undermine profits and the company’s shares have lagged behind its rivals.

US president Joe Biden has leaned on domestic oil producers to increase their output after fuel prices spiked to record highs last year when Russia’s full-scale invasion of Ukraine sparked fears that global oil supply would fail to keep up with growing demand.

Starlee Sykes, head of BP’s Gulf of Mexico business, told the Financial Times in an interview that the company had responded to Biden’s call and planned to continue exploration for new oil and gasfields in those waters. Argos is BP’s biggest new project in the Gulf of Mexico in more than a decade, capable of pumping 140,000 barrels a day of oil and gas from fields under thousands of feet of water. It will raise the company’s production capacity in the region to 400,000 b/d, nearly 20 per cent of its total global output.

“The Gulf of Mexico has some of the best barrels we’ve got and we want to explore and develop more,” Sykes said.

BP also sees the potential to continue expanding output in the region for decades to come, she added, even as it aims for a goal of reaching net zero emissions by 2050.

“It’s massively prolific . . . there’s still a long, long way to go in the Gulf,” said Sykes.

The Argos platform is coming online amid heightened concerns that shortfalls in global oil supplies could lead to a fresh spike in crude prices later this year, a threat to a global economy reeling from high inflation.

Such fears were exacerbated when the Opec+ group of producers said earlier this month that it would cut more than 1mn b/d of output.

Extracted in full form: BP commits to Gulf of Mexico as $9bn platform comes online | Financial Times (ft.com)

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