The multinational oil and gas company, BP, has announced that it will be establishing a separate business that will be responsible for operating its onshore oil and gas assets in the US Lower 48.
The environment of the US Lower 48 (referring to the US states excluding Alaska and Hawaii) has characteristics that are believed to be unique. The new business will focus on this uniqueness and will operate separately from the rest of BP and will be able to respond to the quick changing and hypercompetitive energy landscape in the region. This separation of business is expected to help unlock the value associated with BP’s extensive resource position in the US Lower 48 onshore, which BP oversees through its North America Gas group based in Houston, Texas.
BP will own the new US Lower 48 onshore business but it will be lead by a separate management team and be based out of a new location in Houston. BP is expected to disclose separate financials for the new business starting in 2015. All of these changes are meant to increase the competitiveness of the US Lower 48 onshore business thought more innovation, quicker decision-making and faster cycle times from access to production.
“Now it’s time to reshape the way we run the business – and we are very excited about this bold step forward,” said BP Upstream Chief Executive, Lamar McKay. “Our overriding goal is to build a stronger, more competitive and sustainable business that we expect will be a key component of BP’s portfolio for years to come.”