BP Plans 8% Shale Output Increase, Targets 650,000 Barrels a Day

Khac Phu Nguyen

Fri, February 27, 2026 at 3:53 AM GMT+9 2 min read

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This article first appeared on GuruFocus.

BP Plc (NYSE:BP) is pressing harder into US shale at a moment when several peers are easing off the throttle, a divergence that could carry strategic weight for investors watching its turnaround. Through BPX Energy, the company plans to lift shale production by 8% this year, with output of about 500,000 barrels a day representing roughly 20% of BP’s current global volumes, according to BPX Chief Executive Officer Kyle Koontz. By the end of the decade, Koontz is targeting 650,000 barrels a day, positioning shale as a central lever in BP’s effort to counter the slide in production, profits and shareholder value that followed its 2020 pivot toward renewables and low-carbon initiatives.

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The expansion comes as Diamondback Energy Inc. (NASDAQ:FANG) and EOG Resources Inc. (NYSE:EOG) adopt a more restrained posture, reflecting concerns about a potential worldwide crude glut that could weigh on prices. International oil prices have recently traded below the $70 per barrel assumption underpinning BP’s strategy announced last February, yet Koontz indicated that short-term price fluctuations are unlikely to alter long-term drilling plans. He suggested BPX would only reconsider its growth path in the face of a broader macro disruption similar to the Covid-19 shock that shook the industry.

At the same time, BPX aims to reach its 2030 production objective while spending $800 million less capital, a shift Koontz said could allow BP to redeploy funds into other growth projects across its portfolio. That capital discipline may be particularly relevant as BP works to strengthen its balance sheet after asset disposals and reduced upstream investment drove overall output lower, leaving its market capitalization nearly 40% below early 2019 levels and behind ConocoPhillips and Petrobras in valuation. Carol Howle, BP’s trading chief and interim CEO until Meg O’Neill takes over in April, described BPX as a core part of the company with a strong production forecast through the end of the decade, even as investors continue to question whether a sale or spin-off might unlock additional value.

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