The London-based oil major BP has revised its outlook for upstream production in the second quarter of 2023, now expecting it to be higher than in the first quarter. This marks an upgrade from the previous forecast, which anticipated production to remain broadly flat. This adjustment comes amid a complex backdrop of production trends within the company and its industry peers.

BP’s second-quarter results showed a slight decline in reported production compared to the same period in 2022, with a 2.2% decrease reported and underlying production down 2.9%. This drop was largely attributed to lower base performance but was partially offset by new project deliveries, including the commencement of production from the MJ field in India's KG D6 block, which is expected to supply about 15% of India’s gas demand. Additionally, BP's renewables pipeline remained robust, standing at 39.6GW at the end of the quarter, incorporating 16.6GW from its Lightsource bp initiative.

Looking ahead, BP plans further increases in upstream output through 2024, building on a 3% rise in production in 2023 driven by US shale and major project developments. The BPX shale unit's production surpassed 400,000 barrels of oil equivalent per day (boe/d) as of November, a more than 25% increase compared to the previous year. New developments such as the North Sea Seagull project and expansions approved in the US Gulf of Mexico are expected to underpin these growth targets, with ambitions to boost US upstream production to 1 million boe/d by the end of the decade.

BP’s positive production forecast contrasts with recent results reported by other leading oil companies. ExxonMobil saw a decrease in net production of crude oil, natural gas liquids, bitumen, and synthetic oil in the second quarter when compared to the previous quarter, with declines in both US and global natural gas output. Likewise, Chevron recorded a modest increase in net oil-equivalent production compared to the previous year, mainly due to the Permian Basin, but experienced lower international upstream earnings partly caused by reduced price realizations and foreign currency effects.

These production updates come amid wider economic concerns, including a softening of the UK economy. Recent figures show the UK's GDP contracted by 0.1% in May, following a 0.3% decline in April. This sluggish growth, combined with the potential imposition of US tariffs on Canada and the European Union, has impacted market sentiment and contributed to a slight decline in the FTSE 100. Analysts from Goldman Sachs have moderated their UK GDP growth forecasts for 2025 in light of these developments, while major European and US stock indices reflect ongoing economic uncertainties.

Taken together, these developments highlight the mixed dynamics shaping both the energy sector and broader economic environment. BP's upward revision in production forecasts signals confidence in its growth projects and shale operations, contrasting with some peers' production declines. Meanwhile, global economic pressures persist, influencing market performance and industry outlooks.

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Source: Noah Wire Services