BP intends to put up a new facility for blending lubricants in China at a price of $227 million as part of the energy giant’s goal of growing its market share in the second-biggest economy in the world. It is expected that the lubricants-blending plant will begin operations before the year 2022.
On an annual basis the plant’s capacity will be approximately 200,000 tons. The premium greases and lubricants that will be processed at the facility will be used not just in motor vehicles but in aviation engines too.
This comes in the wake of BP increasing moving away from crude oil and increasing investments in natural in various parts of the world. For BP this is part of the company’s transformation efforts following the Deepwater Horizon tragedy which occurred in 2010. Additionally this has also been necessitated by the slump in oil prices as well as the worldwide efforts to reduce carbon emissions. Historically, BP’s portfolio consisted of 60% oil but by 2020 this is expected to turn to 60% natural gas.
In 2017 seven major projects have been completed by BP in Australia, Oman, Trinidad and Tobago and Egypt. BP has also completed a project in the UK’s North Sea. Other than the North Sea project which is a crude oil venture all the other projects are focused on natural gas. Being a cleaner fuel, natural gas is expected to gain prominence in the coming decades.
Below budget and on time
According to BP’s Dave O’Connor, despite running behind schedule and over budget in the whole of 2010, the energy giant has since then been transformed and now leads with regards to finishing projects on time and below budget.
“We’ve come a long way. This is the biggest year in our history in respect to completing, commissioning and starting up projects,” said O’Connor.
Next year BP expects to complete an expansion of a project in Gulf of Mexico. BP is carrying out the project in conjunction with Anadarko Petroleum Corp. The oil major is however moving resources and attention from the Gulf and may in future consider other projects in the United States in the future though for now all the growth is hailing from its four Gulf platforms – Mad Dog, Thunder Horse, Na Kika and Atlantis.
Before embarking on new projects BP has to prove that returns average 15% with regards to the global oil benchmark. The benchmark for North Sea’s oil is currently at $62 a barrel.