Report summaryBP's ongoing pursuit of its long-held mantra of ‘value over volume’ underpins a strategy focused on capital discipline. This is flowing through to improved performance as the company looks to balance organic cash inflows with outflows in 2017 at around US$50/bbl to US$55/bbl. This is in line with our estimates.
A more balanced approach to longer-term growth will see investment in higher-value organic opportunities take precedence over greenfield project sanctions, at least in the near-term. Exploration will be de-emphasised in a move to a broader growth strategy that will likely also include the capture of discovered resource opportunities and small-scale M&A.
Yet this strategic progress has not translated into a market re-rating. We calculate that BP is trading at a 14% discount to our base case NPV,10 valuation of the business as it appears to battle a perception that relative to peers it is not well-positioned for longer-term growth.
This report includes 2 file(s)
- BP corporate report PDF - 1.93 MB 25 Pages, 8 Tables, 33 Figures
- BP Corporate Report.xls XLS - 3.76 MB