The Coega refinery has been proposed for construction on the Eastern Cape of South Africa. However, BP Africa has been calling upon the South African Government to consider several other factors before approving the construction of this refinery.
PetroSA want urgent approval of the US$ 10 billion, 400 000 bpd greenfield facility as they feel it is the most sustainable solution for helping meet South Africa’s domestic oil needs. However, BP has proposed that the government first considers the expansion and upgrade of existing refineries as it would be the cheaper option for South African tax payers, it is very likely that construction will cost more than the US$ 10 billion estimate and there is already a vast global refining surplus.
Outlining 2010 finances
On 2nd March BP released outlines of its 2010 financial plan. In the final quarter of 2009, BP’s marketing and refining business accumulated a US$ 1.9 billion loss and Tony Hayward, BP chief executive sees the challenge as making BP more profitable in 2010 under circumstances similar to those experienced in 2009.
BP plans to boost efficiency and reduce costs with the aim of increasing pretax profitability by over US$ 3 billion within the next three years. BP also wants to extend its medium term oil and gas production outlook, projecting an output rise of 1 – 2% /y until 2015.
Refining and marketing
As part of BP’s new refining and marketing strategy Hayward has stated that the company wish to not only increase profitability but ensure that refining operations can be profitable even in the depressed conditions experienced in 2009. Hayward said, ‘BP’s R&M business was well placed to compete because of the quality of its portfolio, featuring on average larger and more advantaged refineries than its competitors.’
Exploration and production
To aid with the increase in production output, BP is already executing an organisational restructure to centralise project management, improve cost efficiency and create operation consistency. Also, a Centralised Developments Organisation is being created to manage all major projects in BP’s portfolio.
BP also expects to reach investment decisions on 24 new projects in the next two years and startup 42 new projects between 2010 and 2015 contributing 1 million bpd to total global production by 2015. Also, Hayward has confirmed BP’s commitment to low carbon businesses, focusing on wind power, biofuels, solar power and carbon capture and sequestration.