MIDLAND, Texas (Big 2/Fox 24) – After reporting a loss of over $16 billion for the second quarter of 2020, London-based BP announced that they would cut oil production and invest in renewable energy.
The company said in a press release Tuesday that they hope to cut 40% of their oil production by 2030. Additionally they plan to invest $5 billion every year in renewable energy. Local financial expert Mickey Cargile says that while the changes look drastic, the Permian Basin is most likely safe from the cuts.
“We’re very blessed to be in this area, because the production here is actually a high margin business. So oil companies are wanting to hang on to these assets even as they sell other assets.”
He also added that the company is “committed to the Permian, as much as any company can be.” And though there is a chance that BP leaves the West Texas oil scene, Cargile says that in times like that, the industry succeeds.
“And we’ve seen Midland grow in the period where majors pull out. So it’s nothing to fear even if they do move out.”
Cargile says that while he doesn’t see the industry getting better, “we expect that at least things are going stop getting worse.”
This is the first week since the pandemic started that the number of rigs has not declined in the Permian Basin. WTI Crude has traded above $40 since late June.