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Business News

BP takes $1.1bn hit on failed Brazilian well, but reveals 'significant' discovery in the Gulf of Mexico


BP suffered another blow today after the oil giant announced it is taking a $1.1 billion  (£675 million) hit on an uneconomic oil prospect off the coast of Brazil.

The oil giant said that the offshore Brazilian exploration well Pitanga, which was bought as part of a $7 billion deal to acquire assets from Devon Energy in 2010, had cost some $230 million to drill and that it would take a further  $850 million writedown on the value paid for the field.

On the positive side BP said that it had made its third significant Paleogene discovery in the Gulf of Mexico. The Gila discovery is another deep water oil field.

Richard Morrison, regional president of BP’s Gulf of Mexico business, said: “The Gila discovery is a further sign that momentum is returning to BP’s drilling operations and well execution in the Gulf of Mexico.”

BP is still counting the cost of its Gulf of Mexico Macondo blowout in 2010, whose effects on wildlife are pictured. The disaster has cost it more than $40 billion in fines and compensation.