BP has announced its biggest oil and gas discovery in over 25 years, marking a significant find as the energy giant shifts its focus back to fossil fuels. The FTSE 100 company made the discovery after drilling a well off the coast of Brazil in the Bumerangue oil field.
The field sits just over 400 kilometres offshore from Rio de Janeiro and spans more than 300 square kilometres. BP said this was its tenth discovery in 2025 and estimated to be its largest since finding the Shah Deniz gas field in the Caspian Sea in 1999.
BP celebrates major Brazilian find
Gordon Birrell, BP's executive vice president for production and operations, said: "We are excited to announce this significant discovery at Bumerangue, BP's largest in 25 years. This is another success in what has been an exceptional year so far for our exploration team, underscoring our commitment to growing our upstream."
He added that Brazil was an important country for BP and the company's ambition was to explore establishing a material production hub there. Shares in the group lifted around 1.5% higher in Monday trading following the announcement.
Results expected to show earnings fall
The discovery comes ahead of BP's half-year results on Tuesday, which are expected to show a significant fall in the company's second quarter earnings. BP, like rival Shell and other peers, has shifted away from net zero ambitions to focus on extracting more oil and gas following pressure from investors to boost profits.
Activist investor Elliott Management has taken a 5% stake in BP and is reportedly putting pressure on the energy giant to cut costs. BP recently warned that quarterly earnings would be weighed down by lower oil and gas prices.
Production guidance raised despite challenges
Last month the company raised its oil and gas production guidance for the second quarter compared with the previous three months. However, BP said lower prices received for its oil production were expected to impact results by up to 800 million dollars (£602 million).
Victoria Scholar, head of investment at interactive investor, said cost cutting efforts and shareholder returns would be in sharp focus when BP reports on Tuesday. She expects the company to deliver 1.8 billion dollars (£1.4 billion) in underlying replacement cost profits for the second quarter.
Analysts predict significant profit drop
This would be higher than the 1.38 billion dollars (£1.04 billion) reported for the first quarter, which was a 49% year-on-year slump due largely to weaker oil prices. But it would mark a big drop from the 2.8 billion dollars (£2.1 billion) reported in the second quarter of last year.
Scholar said: "Weaker refining margins and lower volumes have been a mainstay of performance over recent quarters. The weakening macroeconomic backdrop and OPEC+'s strategy shift towards boosting production are expected to keep a lid on oil prices and are key headwinds for BP."
Trading performance under scrutiny
She added that oil trading would also be in focus after rival Shell reported a disappointing trading performance in the quarter, struggling to deal with speculative market volatility. All eyes would be on any changes to cash returns for shareholders after BP lowered its share buyback in April.
Shares in BP are down by nearly 7% over the past year. The stock has also been affected by reports that Shell was exploring a possible offer to buy BP, only for the speculation to be quashed in June when Shell told investors no talks had taken place and it had "no intention" of putting forward a bid.
(PA) Note: This article has been edited with the help of Artificial Intelligence.
