BP p.l.c. (NYSE:BP) has been selected by India's ONGC as a Technical Services Provider (TSP) to enhance production from Mumbai High Field.
Notably, Shell and BP took part in the pre-bid process, with BP ultimately submitting the bid.
Under the agreement, BP is anticipated to receive a fixed fee for the initial two years, followed by a performance-based service fee linked to a share of net incremental production revenue, after recovering costs.
The contract duration is ten years and BP projects a significant increase in crude oil and gas production during the period, with crude output rising by ~44% from 45.47 MMT – 65.41 MMT baseline production and gas production growing by ~89% from 24.94 BCM – 47.22 BCM.
The company expects combined oil and gas output to rise by ~60%, from 70.40 MMToe – 112.63 MMToe.
The production boost is anticipated to be visible from FY26, with full-scale output targeted by FY28.
The incremental increase is expected to generate up to $10.3 billion in additional oil and gas revenue and up to $5 billion in incremental contributions to the Indian government through royalties, cess, and other levies.
Last month, BP and XRG's new joint venture, Arcius Energy, will focus on building a competitive gas portfolio in Egypt.
Investors can gain exposure to the stock via Texas Capital Funds Trust Texas Capital Texas Oil Index ETF (NYSE:OILT) and Amplify ETF Trust Amplify Natural Resources Dividend Income ETF (NYSE:NDIV)
Price Action: BP shares closed lower by 2.23% at $31.12 on Wednesday.
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