BP has announced its biggest oil and gas discovery in a quarter of a century, with a potentially multibillion-barrel find off the coast of Brazil. Analysts have described the discovery as a possible “game-changer” for the British energy giant.
The company revealed it had made a significant find at the Bumerangue prospect, located about 400 kilometers offshore in the deepwater Santos Basin. The exploration well, drilled in nearly 2.4 kilometers of water, encountered a 500-meter column of hydrocarbons in a reservoir covering more than 300 square kilometers.
BP has not yet released estimates for the total volume of oil and gas discovered, but Gordon Birrell, executive vice-president for production and operations, confirmed that the find was the company’s largest in 25 years.
Irene Himona, an analyst at Bernstein, said the scale of the discovery could be transformative. “The oil majors only ever announce discoveries when they are truly material and significant for their (large) scale,” she said. “Bumerangue could potentially be large enough to be game-changing.”
She added that BP believes it may have uncovered a “super-giant” structure, comparing it to giant fields such as Shah Deniz and Kashagan, discovered in the Caspian Sea in 1999 and 2000, respectively. These are among the largest oil and gas fields currently in production worldwide.
The announcement comes at a critical moment for BP, which is working to regain investor confidence through a renewed focus on oil and gas. Shares in the company rose 1.5 percent on Monday morning, despite a broader decline in oil prices.
Under CEO Murray Auchincloss, BP is shifting away from its previous emphasis on green energy, a strategy pursued under former CEO Bernard Looney. The company has abandoned plans to significantly cut oil and gas output this decade and now aims for production levels between 2.3 million and 2.5 million barrels per day by 2030.
BP has also been facing pressure from activist hedge fund Elliott Management, which is pushing for deeper cost reductions and a more aggressive retreat from less profitable ventures. On Monday, BP announced it had completed the spin-off of its offshore wind division into a joint venture with Japan’s Jera. Elliott has been advocating for BP to exit wind energy altogether.
The company is expected to report underlying second-quarter profits of $1.8 billion on Tuesday, a decline from $2.8 billion in the same quarter last year due to lower commodity prices.
While BP is one of Europe’s leading oil and gas producers, it has not had any active production in Brazil until now. The Santos Basin, however, is a well-established oil and gas region for other international energy companies.
BP acquired the Bumerangue prospect in 2022 as the sole bidder, allowing it to secure favorable commercial terms. These include revenue coverage for 80 percent of its exploration costs and a 96.1 percent share of the resulting profits.
The company drilled the well to a depth of nearly 5.9 kilometers and intersected the reservoir approximately 500 meters below the crest of the geological structure. Himona suggested the total hydrocarbon column could be as deep as one kilometer. “Five hundred meters would be a super giant; one kilometer would be astonishing,” she said.
BP noted that the hydrocarbons contained elevated levels of carbon dioxide, which can complicate extraction but are not unusual for the region. The company does not consider this to be a major barrier to development.
Himona emphasized that BP was once one of the world’s top exploration companies, before the 2010 Deepwater Horizon disaster. “Today’s find shows they have not lost the skill set and the talent to make big discoveries,” she said. “This find may well see BP’s upstream portfolio longevity extending well into the 2030s or 2040s, and it is this that has been the biggest issue and concern.”
