Oil giant BP plc, along with its partner Kosmos Energy Limited, has received five new lucrative oil blocks offshore Ivory Coast, to be operated with state-owned oil company, Petroci.
The deal includes the CI-526, CI-602, CI-603, CI-707 and CI-708 blocks. Although the percentage of shares to be held by BP and Kosmos in the aforementioned blocks is yet to be disclosed, Petroci will own 10% stake in each block.
The blocks are located at the centre of the Gulf of Guinea. The blocks offshore Ivory Coast have the potential to fetch significant cash flows for BP in the long run.
It is also expected to increase the production capacity of the company and take it closer to its target of adding 800,000 barrels of oil equivalent per day by 2020. London-based exploration and production company, Tullow Oil PLC TUWOY, which is currently focusing on Africa, recently received six blocks in the region.
BP and Kosmos are also working on other West African blocks, which are located offshore Senegal and Mauritania.
The London-based company is among the leading integrated energy players in the world. The firm recently commenced natural gas production at the Khazzan field in Oman. The project, expected to have an inventory of 300 drilling wells, is the largest start-up by BP in 2017. Also, it is the sixth project start-up among the seven new key developments of the company this year.
However, during the first nine months of 2017, BP invested $11.9 billion in organic projects. In addition, the company expects organic spending between $15 billion and $17 billion in 2017. The trailing 12-month return on capital (ROC) for BP is not quite encouraging. The company’s ROC, which stands at 2.9%, is lower than 4.8% of the broader industry.