BP plc (NYSE:BP) Invests $9 Billion In Fuel Stations and Exploration in Australia

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By Mark Michaels on August 22, 2014 Company, Energy & Solar

As the operator of the largest oil refinery in Australia, BP plc (NYSE:BP) just announced that the company is planning to spend an additional AUD$10 billion (USD$9.3 billion) in investments for its fuel stations and oil and gas projects. The company will spend that money over the course of the next 10 years to expand its network of filling stations and to develop its gas and oil projects, such as the Browse venture.

The company plans to open twelve new filling stations over the course of the next twelve months. At the same time, BP will also increase the fleet of stations through acquisitions. The president of BP’s Australia enterprise, Andy Holmes, engaged in an interview. He refused to elaborate further about the company potential targets for buyouts. The British oil company also plans to invest about AUD$2.3 billion over the course of the next five years on its refineries in its downstream units, such as its refinery located in Kwinana, Perth.

BP is pulling back on its refining operations in Austrialia, but it is still trying to increase its retail business. Other oil and gas companies, such as the world’s third largest independent oil trader Trafigura Beheer BV as well as Vitol Group, are trying to increase their presence in the industry. BP will also invest more than AUD$1 billion into a deep water drilling campaign in waters off the southern coast of Australia.

According to Holmes, the company is vying after the big opportunities at the customer side of the business. The company’s focus on motorway stations, truck stops, or filling stations are all aspects that the company is intensifying their focus.

Currently, BP owns approximately 330 of the 1,300 filling stations with the BP brand on it in Australia. By mid 2015, tt will terminate its operations at the Bulwer Island refinery in Queensland. The company is playing with the idea of changing the facility into a terminal to receive fuel imports in order to compete against rivals from Asia.

Retail

Vitol’s auxiliary unit, Viva Energy, plans to spend AUD$1 billion over the course of the next 5 years. This move comes after the company purchased Royal Dutch Shell plc’s Geelong facility in Victoria as well as its 870 site retail business.

Last year, Trafigura’s Puma Energy unit also bought two companies that will provide the company with more than 200 pump stations in Australia.

BP also owns a stake in oil gields that will fuel the Gorgon liquefied natural gas project, which is operated by Chevron Corp (NYSE:CVX). BP also has a stake in the North West Shelf Venture as well as the Browse LNG project. The company will begin its deep water drilling campaign in the Great Australian Bight by 2016, according to Holmes’s interview.

Holmes made it clear that BP has great ambitions to increase the company’s upstream presence even more. He believes that the joint efforts of the Great Australian Bight will become a new hydrocarbon basin. BP also invested heavily into the development and growth of the Browse gas project.s

Woodside Petroleum Ltd, who operates the Browse LNG project, disposed last year of a plan to build a facility onshore in Western Australia. Later, the project was estimated to cost more than AUD$80 billion. Now, the company plans to make a decision in mid 2015 instead on whether it will proceed with a goal to liquefy the gas on giant sea vessels offshore by using technology from Royal Dutch Shell plc.