BP makes largest oil & gas discovery in 25 years offshore Brazil, shares surge

British energy major BP said on Monday it has made its largest oil and gas discovery in 25 years offshore Brazil.

The discovery is a big boost for the company following its strategic shift away from renewable energy to refocus on fossil fuels.

After the announcement, BP shares gained 1.3% by 1107 GMT, outperforming a broader index of European energy companies which was up 0.1%.

BP said it planned to create a major new output hub at the Bumerangue discovery in Brazil, which was probably the company’s biggest since Shah Deniz in 1999, a gas and condensate field in the Azeri part of the Caspian Sea.

According to the company, Shah Deniz – with around 1 trillion cubic metres of gas and 2 billion barrels of condensate initially in place, produced 28 billion standard cubic metres of gas last year.

“Brazil is an important country for BP, and our ambition is to explore the potential of establishing a material and advantaged production hub in the country,” said Gordon Birrell, BP’s production and operations chief, according to Reuters.

BP had secured the Bumerangue block in the Santos basin amid pre-salt rocks in deep water offshore Brazil in December 2022 with what it said were “very good commercial terms”.

The company further said this was its tenth discovery this year, following findings in Trinidad, Egypt, Brazil and others. It had forecast its oil and gas production at 2.3 million to 2.5 million barrels of oil equivalent per day by 2030.

In 2024, the production was 2.4 million barrels of oil equivalent. It expects production to be lower in 2025.

Early results indicate elevated levels of carbon dioxide in the Brazilian block, BP said, adding that further analysis would give more insight into its potential amid a bigger drilling programme in Brazil.

The company is set to report its second quarter results on Tuesday.