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Investing.com -- BP (LON:BP) (NYSE:BP) shares climbed on Monday after the energy giant announced a major oil and gas discovery offshore Brazil, the company’s largest find in 25 years. The discovery was made in the Santos basin, a deepwater pre-salt region considered one of the most promising areas for hydrocarbon reserves.
The find marks BP’s tenth discovery of the year, following earlier exploration successes in Trinidad, Egypt, and other regions. The company is aiming to lift its oil and gas output to between 2.3 million and 2.5 million barrels of oil equivalent per day by the end of the decade.
In 2024, production reached 2.4 million barrels per day, though BP expects a decline in output next year.
BP shares were up 1.6% in London trading as of 09:47 GMT.
BP said initial analysis from the drilling site showed high levels of carbon dioxide. Further laboratory testing is planned to better assess the block’s potential. The company plans to establish a major production hub in the region as part of its renewed focus on fossil fuels.
The discovery comes ahead of BP’s second-quarter earnings report, scheduled for Tuesday.
Separately, The Financial Times reported on Monday that BP is expected to provide fresh details on its $5 billion cost-cutting program when it reports second-quarter results on Tuesday, as pressure mounts from activist investor Elliott Management to take further action on expenses.
Elliott is urging CEO Murray Auchincloss to double down on efficiency efforts by adding another $5 billion in cost reductions to the $4 billion–$5 billion already targeted by 2027, according to the FT. The proposed savings are based on 2023 spending levels.
The hedge fund has “identified tens of thousands of BP support staff globally” as part of the company’s cost structure, the report said.
BP has already achieved $750 million in cuts this year toward its current goal. The company aims to reach the full target through workforce reductions, asset sales, and simplifying its supply chains, the FT added.