Field discovery pushes BP to record high

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BP yesterday announced the discovery of a $1.5bn complex of three oil and gas finds in Colombia. The company has discovered two oil and gas fields overlying the recently discovered Volcanera field. Together, they could represent the third-biggest find in the Americas. BP shares climbed to record levels.

The latest discoveries, called Florena and Pauto, have boosted estimated recoverable reserves for the three-field complex to one billion barrels of liquids and 10 trillion cubic feet of gas. This compares with the 500 million to one billion estimated reserves in BP's discoveries west of Shetland - Foinaven and Schiehallion.

BP declined to comment on the value of the Colombian trio, but some City analysts say the net worth to the company could be 300 million barrels at about $5 per barrel after costs including exploration, production and transportation. BP has a production-sharing agreement with the state-owned company, Ecopetrol, which will take a large proportion of the output.

About 8.5 million BP shares traded yesterday, with the price rising by 6.5p to close at a new peak of 475.5p.

The discoveries are in addition to BP's Cusiana and Cupiagua fields in Colombia, which have estimated reserves of two billion barrels. Colombia has become one of the most important areas for BP since it began expansion into frontier areas in 1989 under John Browne, then chief executive of BP exploration and production.

Mr Brown, who recently became chief executive of BP group, said: "These finds haveconfirmed our view that Colombia is going to be a significant source of growth into the next century."

BP, which is aggressively diversifying beyond its main areas of the UK Continental Shelf and Alaska, has invested about $1bn in Colombia. City analysts say production from the two existing fields is expected to build to about 500,000 barrels a day by 1997/98 and that the new complex should ultimately yield up to 200,000 barrels a day. The new fields are expected to use the same pipeline system being built for Cusiana and Cupiagua.

Other important emerging regions for BP include Vietnam, where it has recently announced the discovery of a further one to two trillion cubic feet of gas. The overseas finds underpin BP's recovery since the middle of 1992, when Bob Horton was ousted as chairman and chief executive.

In February, BP heralded strong dividend growth with a payout of 3p in the fourth quarter of 1994, up from 2.1p in the same period last year. David Simon, chairman, said: "We want to grow the dividend."