BP strikes oil in Gulf of America, steps up fossil fuel pivot with Chevron in billion-barrel push

BP has reported a major oil discovery at the Far South prospect in the deepwater Gulf of America, reinforcing the company’s renewed commitment to upstream investment and fossil fuel exploration. The find, located in Green Canyon Block 584 about 120 miles off Louisiana‘s coast, is seen as a key part of BP’s broader strategy reset announced in February 2025, which aims to lift global oil and gas production through 2030 and beyond.

This discovery, jointly held by BP (57.5%, operator) and Chevron U.S.A. Inc. (42.5%), marks a notable milestone in the company’s exploration resurgence. Drilled to a total depth of 23,830 feet in 4,092 feet of water, the Far South well and a subsequent sidetrack encountered high-quality Miocene oil-bearing reservoirs, with early data suggesting potentially commercial volumes of hydrocarbons.

What makes the Far South oil discovery significant for BP’s 2030 vision?

The discovery comes at a time when BP is actively resetting its energy strategy to focus more heavily on hydrocarbon output. Under the new framework, BP plans to grow its global upstream production to between 2.3 million and 2.5 million barrels of oil equivalent per day (boepd) by 2030, with the flexibility to extend capacity through 2035. Of that total, roughly 1 million boepd is expected to come from U.S. onshore and offshore fields—including deepwater assets like Far South.

The Far South find is located just four miles north of the Constellation field, offering potential synergy with nearby infrastructure. This proximity could accelerate development timelines and reduce the cost per barrel for eventual extraction. BP’s confidence in the commercial viability of this prospect is supported by successful hydrocarbon detection across two drilled paths, which intersected quality reservoirs known to be prolific in the Miocene formation of the Gulf of America.

How does the new discovery fit into BP’s broader upstream strategy?

Over the past decade, BP has made more than 40 discoveries across various geographies, with recent drilling successes reported in Trinidad, Egypt, and the U.S. Gulf. The Far South development adds to this growing list and reflects the company’s push to scale up its exploration program, which includes plans for about 40 new wells globally over the next three years. Of those, up to 15 are expected to be drilled in 2025 alone.

BP’s strategy recalibration has prioritised core upstream projects as a means to deliver value to shareholders while maintaining reliable energy supply. This shift follows a period of greater emphasis on renewables, which is now being balanced with increased oil and gas activity in response to geopolitical energy instability and investor demand for higher returns.

What other upstream projects is BP advancing in parallel?

Alongside Far South, BP is also celebrating the start of production at the Cypre gas project off the southeast coast of Trinidad, where it operates through its subsidiary, BP Trinidad and Tobago (bpTT). Cypre is the company’s third subsea development in the region and features seven wells connected to the existing Juniper platform. It is expected to deliver a peak production of around 45,000 boepd, contributing meaningfully to BP’s target of 250,000 boepd combined net output from 10 projects scheduled to come online by 2027.

Located in the East Mayaro Block in approximately 80 metres of water, Cypre is wholly owned by bpTT, itself jointly held by BP (70%) and Repsol (30%). The field is part of BP’s wider Caribbean operations, which continue to play a vital role in its LNG supply chains and gas-export strategy.

How is investor sentiment shifting on BP and Chevron stock?

As of April 15, 2025, shares of BP plc (NYSE: BP) were trading at $27.42, marking a modest 1.9% gain from the previous day. Despite this uptick, the stock remains 32% below its 52-week high of $39.73. Market analysts have issued a “Hold” consensus on BP, with a 12-month average price target of $36.73, indicating a potential upside of around 34%. The outlook reflects cautious optimism amid BP’s continued balancing act between renewables investment and upstream profitability.

Meanwhile, Chevron Corporation (NYSE: CVX) shares stood at $135.39, up slightly by 0.05%. Chevron has recently attracted investor interest following exploration successes in Namibia and strategic developments in the Gulf. Citi recently upgraded Chevron to a “Buy” rating, setting a price target of $185. This bullish stance underscores market confidence in Chevron’s deepwater capabilities and near-term production ramp-ups.

For long-term investors, BP’s recent discovery offers a potential catalyst, but analysts suggest a “Hold” position until more development clarity emerges. In contrast, Chevron’s diversified portfolio and favorable exploration momentum position it as a more attractive “Buy” for those seeking energy sector exposure.

How does the Far South discovery reshape BP’s production map?

The Far South prospect could become a critical production hub for BP in the western Green Canyon area, enhancing asset connectivity across the Gulf. Its proximity to existing developments not only reduces lead time and capital costs but also aligns with BP’s stated goal of increasing production efficiency per barrel.

From a technical standpoint, the Miocene play is a proven hydrocarbon system, and its reservoir characteristics are well-studied across the region. BP’s successful tapping of this zone adds geological certainty to its broader drilling program, potentially de-risking nearby prospects slated for exploration in 2025 and 2026.

The timing of the discovery—shortly after BP’s start-up of Cypre in Trinidad—also showcases the operator’s simultaneous advancement of high-impact assets across multiple geographies, which could improve investor perception of its execution capabilities under the new leadership structure.

Why does this matter for global energy markets?

The announcement reinforces a growing trend in the energy sector: a cautious pivot back to traditional fossil fuels as geopolitical risks, inflationary pressure, and capital market expectations force integrated energy majors to rethink timelines for energy transition. For BP, Far South represents not just another discovery—but a signal to investors and policymakers that oil and gas will remain central to its value proposition through 2035.

While the company continues to explore lower-carbon solutions, such as hydrogen and offshore wind, the core emphasis remains on ensuring energy reliability and returns. The Gulf of America, with its rich geology and mature infrastructure, continues to play a central role in that plan.