BP to separate U.S. shale assets into new business
The U.S. Lower 48 onshore oil and gas business environment has unique characteristics. Responding to these, the new business will operate separately from the rest of BP and will be designed to adapt to the rapidly changing and hyper-competitive energy landscape in the region. This move is expected to help unlock the significant value associated with BP's extensive resource position in the U.S. Lower 48 onshore, which BP currently oversees through its Houston-based North America Gas group.
BP will own the new U.S. Lower 48 onshore business, with safety remaining its top priority. But the business will be led by a separate management team and be housed at a new location in Houston, apart from BP's Westlake campus.
It will have separate governance, processes and systems designed to address the unique competitive and operating environment in the U.S. Lower 48 onshore. And BP is expected to begin disclosing separate financials for the new business in 2015.
These changes are chiefly intended to improve competitiveness of the U.S. Lower 48 onshore business through greater speed of innovation, faster decision-making and shorter cycle times from access through to production, together with more efficient cost management.
The changes to BP's U.S. Lower 48 onshore business are consistent with the group's strategy of delivering value over volume. BP also believes these moves will enhance efforts to develop industry-leading technology that will be a critical part of BP's global strategy in unconventional oil and gas resources going forward.
The approach BP intends to pursue for its U.S. Lower 48 onshore business is specifically designed in response to the unique business environment in the region. Much of what BP does in other onshore regions around the world will continue to rely on the scale, capital, technology and project management capabilities that only a major international oil company can provide. ■