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231. Bull, Bear & Beyond – In the chair with bp's Ariel Flores: Building a simpler, stronger, more valuable upstream business
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In our latest Edison deep dive, Neil Shah sits down with Ariel Flores, SVP Capital Development, Upstream at bp, for a candid update on a business in the middle of a quiet transformation. Flores walks through a standout 2025: 96% plant reliability, seven of 10 major projects online and the group’s biggest discovery in a quarter of a century – the world-class Boomerang field in Brazil. He explains how bp is keeping existing infrastructure full through fast-cycle discoveries and smart access deals from Iraq to India, and reveals how partnerships with NVIDIA, Palantir and AWS are compressing months of well planning into minutes. With 23 years of commercially viable resource now in the hopper, the closing question is one that investors will want answered: why bp, and why now?
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About ‘Bull, Bear & Beyond’
Bull, Bear & Beyond': features candid conversations with senior executives and from our own team of experts from across industries, exploring strategy, innovation, and the opportunities shaping their markets and 60-second pieces are a compressed summary of content designed to convey our message in a single, easily shareable hit.
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Transcript
Introduction to Edison TV Series on BP
00:00:07
Speaker
Welcome to Edison TV. I am Neil Shah, Executive Director, Edison Market
Ariel Flores Discusses BP's Upstream Strategies
00:00:11
Speaker
Strategist. We are continuing our series of deep dives into BP. This is the second video we're doing.
00:00:18
Speaker
Upstream's been a big focus for the group, and I'm delighted to have Ariel Flores here with me. Before we get into the questions, perhaps just briefly introduce yourself and your role. Sure. It's very nice to be with you.
00:00:28
Speaker
I've been with BP 27 years in six different countries in a variety of technical roles. Currently, I lead our exploration, access, reservoir development organization globally.
00:00:41
Speaker
And we also hold the plan for the group long term for oil and gas assets around the world. Okay. So let's start with the strategy. ah BP told us last year that you're planning to grow the upstream.
00:00:53
Speaker
How is that going? And what's the market reaction to it? It's gone very well since our capital markets update in 2025. We've had 96% plant reliability.
00:01:04
Speaker
The base is performing well. We continue to progress on major projects, seven of 10 major projects online towards 150,000 barrels of additional production.
00:01:16
Speaker
We have made final investment decision on our next wave of projects, leading to an additional 250,000 oil equivalent at peak Our reserve replacement ratio, which we set an aspiration to be at 100% by 27, was at 90% in 25, well on track towards that aspiration.
00:01:39
Speaker
Our performance on the base is going well. Our operating efficiency is at historic highs. We continue to focus on our cost base, ah circa $6 per barrel of oil equivalent lifting cost.
BP's Organizational Focus on Simplicity and Efficiency
00:01:52
Speaker
You saw a shift towards our balance sheet, our efforts.
00:01:56
Speaker
Our divestment program is going well. We announced progress on most of our major work streams, well underpinned, and strengthening the balance sheet was announced as well.
00:02:08
Speaker
And that's all in support of what we see as a very viable organic growth proposition. The market feedback has been very positive. Meg's come on board. We're now moving towards a
Significant Discoveries and Successes in Global Markets
00:02:20
Speaker
simpler upstream, downstream organization.
00:02:23
Speaker
We will create focus that will lead to simplicity and the way we turn things around, improving cycle time. and will continue to be very disciplined around our capital allocation.
00:02:36
Speaker
That way, quality through choice features as we grow the hopper, and that will allow us to make sound investment decisions for value that will ultimately underpin our volume growth.
00:02:48
Speaker
You made really good progress in addressing the concern around resource longevity. Could you give us an update on exploration success and accessing discovered resource? Yes, 25 was a very successful year for for exploration. I'll start with the biggest discovery BP's made in 25 years, our boomerangue field in Brazil, world-class structure in a well-established basin.
00:03:14
Speaker
and we're actively focused on progressing the project to its next stages. The drill ship is now on BP's books and will continue to start with Tupanamba and then move on to the appraisal program on Buberenge.
00:03:29
Speaker
In addition, we had another 11 discoveries in 2025. Egypt had four discoveries, gas, fast cycle time to first gas,
00:03:41
Speaker
through existing infrastructure, both in the West and the East. We had a discovery in Trinidad, Frangipani, which we're also looking to fast-track multiple stack pay that will underpin with a concept to existing infrastructure, LNG included.
00:03:57
Speaker
We had a very successful year in Azul, ah both in Angola and in Namibia with the Capricornis and Volans discovery. And in the Gulf of America, where we maintain an exploration program throughout, we had two successful discoveries around existing infrastructure.
00:04:15
Speaker
These all
Exploration Plans and Opportunities for 2026
00:04:16
Speaker
provide short cycle time, fast turnaround opportunities, and that will lead to an accretive outlook to our plan as it relates to free cash.
00:04:27
Speaker
As you shift towards 2026, we've got another exciting year ahead of us. We will be drilling to Penamba, as mentioned, in Brazil, acquired in the same permanent offer that so we acquired with Womarengue.
00:04:44
Speaker
We also have an exciting well and conifer towards the end of the year in the Gulf of America. This provides an opportunity for a tieback to our casqueta project, which is being constructed as we speak.
00:04:58
Speaker
So all these provide significant resource potential opportunities, and we continue to progress our exploration program in line with our strategy. Moving on from exploration to access,
00:05:11
Speaker
We accessed the Kirkuk opportunity in Northern Iraq, playing on the strength of our performance and delivery in Southern Iraq in Romeila. We've got an exciting opportunity in Karabakh, which would harness existing infrastructure and ACG, working with SOCAR and the government to unlock more resources through existing infrastructure. And we accessed opportunities in India, also playing to keeping existing infrastructure full with new gas opportunities. All
AI and Tech Partnerships in Enhancing Efficiency
00:05:41
Speaker
these provide for exciting, accretive opportunities because it's harnessing capital that's already deployed.
00:05:49
Speaker
An area of increasing interest is technology and AI. Can you explain how you're ah harnessing technology, specifically AI, in your upstream business?
00:05:59
Speaker
Yes, it's moving at pace, and we're harnessing world-class partnerships with the likes of Palantir, NVIDIA, AWS, and Databricks. We've got foundations and systems like SAP.
00:06:14
Speaker
and Working with these partners, we're looking at cost reduction efforts to replace repetitive tasks and looking to harmonize work streams that lead to efficiency, cycle time reduction.
00:06:29
Speaker
And that's going extremely well and we're progressing through all of our assets. Coupled with that is enhancing for value by maximizing recovery of resources and allowing us to move towards more accretive opportunities in our hubs.
00:06:44
Speaker
and i'll start with seismic and seismic clearly increasing image fidelity and resolution will allow us to drill better more competitive wells which we're doing by harnessing our new nvidia gpus in our houston computing center This is allowing for processes to move from four times to 10 times to 50 times increase in productivity.
00:07:09
Speaker
That allows for algorithms, more complex algorithms, to actually converge. And that's equating to to better images for our practitioners to identify enhanced targets.
00:07:21
Speaker
That is leading to infill developments across most of our assets. And that is then helped by Wells and Wells AI. And what we've introduced is an offset well analyzer.
00:07:34
Speaker
It pulls all relevant data in much faster and efficient way to allow us to look at all potential outcomes of various well trajectories. We're looking at hundreds of trajectories in minutes where it would take months in some cases to plan.
00:07:52
Speaker
And that Agentec AI tool for wells is helping us to identify the optimum trajectory, most cost competitive, safe, to ensure we hit what we believe is an enhanced accumulation of oil and gas through our image technology.
00:08:09
Speaker
On top of that, we pull it all together through reservoir simulation and integrated asset modeling. Once again, underpinned by our Palantir Foundry Foundation, but now linked to simulations and top-down reservoir modeling to enhance the potential outcomes of more developed schemes to ultimately drive an increase in recovery for our stakeholders and partners in what we know is a more technically underpinned way.
00:08:38
Speaker
this is all coming together across all of our various disciplines in a way that's enhancing quality of product, shortening cycle times, improving the cost base of how we acquire this data, and allowing for interchange between software and tools like never before.
00:08:56
Speaker
Huge progress, and I believe this
Focused Oil and Gas Portfolio for Long-term Value
00:08:58
Speaker
will go a long way in enhancing recovery of reserves through capital already deployed. And to round things off, perhaps you could summarize, why should we invest in BP?
00:09:11
Speaker
It's great proposition, and one that is simpler, stronger, more valuable across our oil and gas portfolio. We're going to be focused and maintain momentum that led from 25 into 26.
00:09:27
Speaker
What we stated at Capital Markets Day for 27 outturn is very well underpinned. We're making great progress around resource progression and volume delivery. And there's more to do.
00:09:39
Speaker
And that more is underpinned by what is now a very rich hopper of organic opportunities. Per Woodmac, we've got 23 years of resource that are both commercially and economically viable.
00:09:53
Speaker
And that's going to allow us in a focused way to create more near-term and longer-term value. as related to our previous plan. And it's coming together nicely in the new upstream.
00:10:06
Speaker
And we look forward to updating the market as we continue to progress our resources. Ariel, thank you very much. and congratulations on the progress made year to date. And we look forward to seeing how the journey develops. Thanks for being on Edison TV.
00:10:19
Speaker
Thank you very much. It's been a pleasure.