BHP Group At Vantage Point to Leverage Strong Demand for Crude Oil 

Source: Virrage Images, Shutterstock


  • Crude oil demand is expected to increase by 6 Mbbl/d in 2021 amidst sound economic growth in the second half.
  • BHP owns strategic assets in the most prominent oil & gas geographies including GOM, Australia and Mexico.
  • The Company has set aside nearly half a billion dollars to support exploration and appraisal activities this year.

The oil cartel-OPEC has released its monthly report for April. The report presents an optimistic view of the oil & gas industry for the rest of the year 2021. The demand is forecast to increase by 6 Mbbl/d Y-o-Y in 2021.

The cloud of COVID-19 fear is anticipated to subside as global vaccine cover will increase. The world could witness more relaxation in movement, leading to a surge in fuel consumption, primarily in the petrol and diesel categories.

Copyright © 2021 Kalkine Media Pty Ltd.

The global oil demand is estimated to remain around 90.5 Mbbl/d in 2021. The second half of the year is expected to deliver sound growth in demand amid robust economic performance by the global economies.

In the supply-side, Russia and the US have shown a decline in production. The OPEC countries produced 25.04 Mbbl/d of oil during March. In the near term, oil production is expected to remain in the same range. As the latest trends of oil rig numbers in the US are up, a decent growth in production levels can be expected.

Global resource giant BHP Group Limited (ASX:BHP) owns several resource-rich oil & gas assets in some of the world’s prolific basins. The Company has operating assets in the US Gulf of Mexico (GOM), Australia, Trinidad & Tobago, Mexico, and Algeria.

Also Read: BHP Group (ASX:BHP) firing on all cylinders amid booming copper demand 

BHP has set its petroleum production guidance for FY21 in the range of 95-102 Mboe. During 1H FY21, the Company reported hydrocarbon production of 50 MMboe. The reporting period saw several hurricane appearances in the Gulf of Mexico, impacting the production adversely.

Copyright © 2021 Kalkine Media Pty Ltd.

The acquisition of an additional working interest of 28% in the Shenzi Project in GOM shows the intention of the Company to become a major oil & gas player in the region. BHP now holds a 72% interest in the project. The Company has set aside US$450 million for the exploration and appraisal program during the ongoing financial year.

Good Read: FMG, BHP, and RIO Fly High on Soaring Iron Ore Prices

The Ruby Project in Trinidad & Tobago is running on schedule and under budget. BHP is the project operator with a 68.46% stake. The project is scheduled to commence production in 2021. On completion, the Ruby Project will produce up to 16,000 barrels of oil per day and 80 Mcf/d of natural gas.

The Bass Strait West Barracouta Project is also expected to become operational this year. The new floating production facility at Mad Dog Phase 2 (GOM) is taking final shape and is likely to start production in 2022. The facility, entailing an investment of US$2.154 billion, is designed to have a production capacity of 140,000 barrels of oil per day.

Recent update: Where will BHP Group’s share price go from here?

In Mexico, the project is in its initial stages of the exploration phase. The Company has concluded the seismic acquisition over the Trion field.

BHP was trading at A$46.990 on 15 April 2021 (AEST 12:46 PM) with a market cap of A$135.53 billion.

Many other ASX-listed players operating in the oil & gas industry are experiencing swift movements in their share prices including Santos Limited (ASX:STO), Origin Energy (ASX:ORG), Woodside Petroleum (ASX:WPL) and Oil Search Limited (ASX:OSH).

Read Here: Higher commodity prices turbocharge BHP’s profits





Top Penny Picks under 20 Cents to Fit Your Pocket! Get Exclusive Report on Penny Stocks For FREE Now.

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK