• 3 minutes Oil Price Could Fall To $30 If Global Deal Not Extended
  • 8 minutes Why Is America (Texas) Burning Millions of Dollars Per Day Of Natural Gas?
  • 11 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 15 minutes CNN:America's oil boom will break more records this year. OPEC is stuck in retreat
  • 21 mins The Pope: "Climate change ... doomsday predictions can no longer be met with irony or disdain."
  • 9 hours Hormuz and surrounding waters: Energy Threats to the World: Oil, LNG, shipping markets digest new risks after Strait of Hormuz attack
  • 13 hours As Iran Nuclear Deal Flounders, France Turns To Saudi For Oil
  • 8 hours The Magic and Wonders of US Shale Supply: Keeping energy price shock minimised: US oil supply keeping lid on prices despite global risks: IEA chief
  • 18 hours Middle East on brink: Oil tankers attacked off Oman
  • 12 hours Never Knew Gasoline Prices were this important!
  • 9 hours Russia removes special military forces from Venezuela . . . . Maduro gone by September ? . . . Oil starts to flow ? Think so . .
  • 10 hours (Un)expectedly: UK Court Sets Assange U.S. Extradition Hearing For February 2020
  • 6 hours We Are Better Than This
  • 20 mins Plants are Dying
  • 1 day Britain makes it almost 12 days with NO COAL
  • 1 day Emmissions up, renewables nowhere
  • 10 hours The Latest: Iranian FM Says US Cannot Expect To ‘Stay Safe’
Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Trending Discussions

BP’s Risky Investments Turning Sour

After years of trying to turn things around following the Deepwater Horizon oil spill, BP is still running into significant challenges.

A new report from the Wall Street Journal finds that a multibillion dollar investment in India is not working out as planned for the British oil major. In early 2011, BP agreed to pay $7.2 billion in order to take 30 percent stake in Reliance Industries Ltd., an Indian oil and gas producer.

The positon would give BP exposure in 23 oil and gas projects in India, a country with both rapid growth and extraordinary pent up energy demand. BP saw it as a bold move, and it boasts the largest international presence in India. Three other oil majors passed on the deal back in 2011. Still, with the unknown bill for the Deepwater Horizon spill looming large, BP decided to roll the dice, hoping to get a head-start in what is arguably one of the most important sources of energy growth in the 21st century. Related: This Is Why The U.S May Actually Not Be The No.1 Oil Producer

However, its investment in India is turning into a headache. BP’s CEO Bob Dudley went to New Delhi in mid-July to “review progress of BP’s business and future plans in India,” according to the WSJ.

The promise was big, but things are not panning out. The WSJ reports that production from BP’s India assets are down 80 percent since 2010. And putting a floor beneath plummeting production has required another $1 billion. Related: Will Morocco Finally Realize Its Shale Dream?

In 2014, The Economist chronicled the mess that BP found itself in. There are a variety of unique challenges that BP is facing in India. Bureaucratic red tape and corruption are complicating operations. Price controls distort the market and cut into revenues. The company recently said that it would consider further investments if there was “appropriate pricing.”

But BP knew of this problem before jumping into India. Prices are regulated, and policy is at times fickle, presenting investment challenges. Related: Schlumberger Vs. Halliburton: Which Is The Better Buy Right Now?

India is not the only blemish in BP’s portfolio. BP also has a 20 percent stake in Russia’s state-owned oil company Rosneft, and western sanctions are damaging the value of those assets.

The combined troubles have resulted in a more dramatic decline in BP’s oil production than its peers. Over the past six years BP dropped from first to fifth in terms of total oil production equivalent. And it is not clear that it can turn things around in the near future.

By Charles Kennedy of Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment
  • hl on July 24 2015 said:
    Error - not a 30pc stake in reliance industries but only in its oil field.

Leave a comment





Oilprice - The No. 1 Source for Oil & Energy News