BHP sees slow recovery in oil and gas demand

UK-Australian resources firm BHP's oil and gas production fell by 10pc in its latest financial year and could drop by another 13pc in the next 12 months. Energy demand is unlikely to return to pre-Covid-19 levels before the end of 2021, the company said.

Oil and gas output dropped by 10pc from a year earlier to 298,000 b/d of oil equivalent (boe/d) in the July 2019 to June 2020 financial year, marginally below BHP's guidance of 301,000-317,000 boe/d because of weaker-than-expected gas demand. The company expects production to fall to 260,000-279,000 boe/d in 2020-21.

Crude and condensate output was down by 11pc to 134,000 b/d in the most recent financial year, hit by storms in the Gulf of Mexico and western Australia, maintenance and natural field declines. Weaker market conditions and the impact of Covid-19 contributed to a 15pc year-on-year fall in April-June output to 121,000 b/d.

The most significant risks to the physical oil market from the volatility earlier this year have now passed, BHP said. But it expects only a slow recovery in demand, with the possibility of a widespread second wave of coronavirus infections making up a key uncertainty in its regional outlooks.

Source: argusmedia.com

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