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BP posts US$20bn loss in 2020 and sells stake in Oman asset

BP has released its 2020 results, posting a US$20.3bn loss (compared with a US$4bn profit in 2019), due to significant impairments and exploration write-offs taken in the second quarter of 2020. The group suffered from a depressed demand owing to the COVID-19 pandemic, from lower oil and gas prices, and from continuing pressure on refining margins. However, it succeeded in reducing production costs (-6.5% for upstream unit production costs). Despite new projects commissioned in 2020 - Ghazeer in Oman, Vorlich in the United Kingdom and KG D6 R-cluster in India - upstream production declined by 9.9% due to divestments.

BP has completed the sale of over half of its target of divesting US$25bn of assets by 2025 and now plans to sell US$4-6bn of assets in 2021. The group has just reached an agreement with Thailand's national oil exploration and production company PTT Exploration and ‎‎Production (PTTEP), under the terms of which BP will sell a 20% stake in the Block 61 in Oman to PTTEP for US$2.6bn. The transaction, subject to approval from the Sultanate of Oman is expected to be completed in 2021. BP will retain 40% in the block and will remain the operator; other partners include OQ (30%) and Petronas (10%). The Block 61 holds the largest tight gas ‎development in the Middle East and two development phases were launched in 2017 (Khazzan) and 2020 (Ghazzer) to tap 10,500 bcf (nearly 300 bcm) of gas resources and produce 1.5 bcf/d (42 mcm/d or 15.5 bcm/year) of gas and over 65,000 bbl/d of condensate.