Pedro Goncalves writes:<\/p>\n
Shares in BP (BP.L<\/a>) rose 1% in London on Monday after the oil major announced its largest oil discovery in 25 years, located offshore Brazil, in a move the company says underscores its upstream ambitions at a time of rising investor pressure to cut costs.<\/p>\n BP (BP.L<\/a>) told the City it had made a significant oil and gas find at the Bumerangue prospect in Brazil\u2019s deepwater Santos Basin, 404km from Rio de Janeiro. The exploration well was drilled to a depth of 5,855m in waters 2,372m deep. The company said it encountered a 500m hydrocarbon column in a \u201cpre-salt carbonate reservoir\u201d spanning over 300 sq km.<\/p>\n \u201cWe are excited to announce this significant discovery at Bumerangue, BP\u2019s largest in 25 years,\u201d said Gordon Birrell, BP\u2019s executive vice president for production and operations. \u201cThis is another success in what has been an exceptional year so far for our exploration team, underscoring our commitment to growing our upstream. Brazil is an important country for BP, and our ambition is to explore the potential of establishing a material and advantaged production hub in the country.\u201d<\/p>\n The announcement comes as BP (BP.L<\/a>) prepares to update investors on Tuesday about its $5bn cost-cutting programme, under intensifying scrutiny from activist investor Elliott Management. The US hedge fund, which has built a 5% stake in BP, is pushing for deeper operating expense reductions, urging the group to target $20bn of free cash flow by 2027.<\/p>\n Elliott wants chief executive Murray Auchincloss to increase cost savings by an additional $5bn on top of the $4bn\u2013$5bn target he outlined in February, based on a 2023 baseline. A person familiar with Elliott\u2019s thinking told the Financial Times <\/a>the fund had \u201cidentified tens of thousands of BP support staff globally\u201d as an example of what it sees as an overly large and inefficient cost structure.<\/p>\n