Energy major BP has announced its most significant oil and gas discovery in 25 years, marking a strategic pivot back to fossil fuels after scaling down its renewable energy ambitions.
The UK-based firm confirmed on Monday that it is testing a major deepwater oil and gas find at the Bumerangue block in Brazil’s Santos Basin, located about 400km off the country’s east coast. The site, containing a 500-metre-thick reservoir of hydrocarbons, could form the centre of a future production hub, BP said.
Gordon Birrell, Executive Vice President for Production and Operations, described it as “BP’s largest discovery in a generation,” adding that it builds on a string of successful exploration efforts this year, including discoveries in the Gulf of Mexico and Egypt.
The announcement comes months after BP slashed its planned investments in renewables and pledged to redirect billions annually towards oil and gas production in a bid to boost investor confidence.
The company’s broader ambition to transition to a net-zero energy business by 2050 has faced setbacks. A $5.7 billion loss in 2020 due to the COVID-19 pandemic and a $25 billion writedown in 2022 following its exit from Russia’s energy sector have weighed heavily on performance.
Despite global energy price fluctuations, BP on Tuesday reported second-quarter underlying replacement cost profits of $2.4 billion, 15% lower than the same period in 2024, but well above analysts’ expectations of $1.8 billion. The company credited the strong showing to increased production and renewed focus on exploration.
Derren Nathan, head of equity research at Hargreaves Lansdown, said the discovery and better-than-expected earnings signal a “slick turnaround” and show that BP is “upping the ante” in its traditional energy business.
BP’s share price has lagged in recent years as its renewable pivot failed to yield immediate returns, while competitors capitalized on booming fossil fuel demand in the wake of Russia’s war in Ukraine.
