) has proposed to form a separate business to manage its offshore
oil and gas assets, including its shale operations in the U.S.
BP PLC (BP): Free Stock Analysis Report
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Currently, BP manages the region through its North America Gas
group based in Houston. The new business will also be managed
from a new location in Houston and not the existing Westlake
campus. The unit will also have a separate management team and
different governance, processes and systems suited to deal with
the unique competitive and operating environment onshore U.S.
Recently, BP completed reforming its North American gas portfolio
by divesting noncore assets and focusing development in
unconventional plays, such as the Eagle Ford Shale. Now it wants
to reshape the way its Lower 48 business is run.
The move is expected to enhance competitiveness as well as assist
U.S. Lower 48 onshore business to lead in innovation and
development of technologies for unconventional resources. The
decision is also likely to assist in unlocking the significant
value related to BP's extensive resource position onshore U.S.
Lower 48. The company's recent proposal is in sync with its
strategy of delivering value over volume.
Lately, BP's request to a federal judge to delay oil spill
compensation payments to seafood workers was denied. BP estimates
the total payment under the spill compensation to exceed $7.8
BP, which is still facing challenges from the Deepwater Horizon
spill in the Gulf of Mexico, intends to report separate financial
results for the new business from 2015. The results will not
include offshore operations.
BP currently holds a Zacks Rank #3 (Hold). Other stocks in the
oil and gas sector such as
Helmerich & Payne, Inc.
Matrix Service Co.
Patterson-UTI Energy Inc.
) with a Zacks Rank #1 (Strong Buy) are expected to outperform.