BP is betting big on the U.S. shale patch to boost its global output and accelerate drilling while maintaining a strong capital budget.
The UK-based supermajor is doing what few other pure shell producers do. Shale drillers are slowing drilling activity, or at least not spending as much on boosting production, amid volatile oil prices that have fallen below expected break-even levels too many times to count in the past few months.
For example, Diamondback Energy, one of the biggest names in the field, plans to keep activity and production flat in 2026 compared to fourth-quarter levels. Production guidance for this year is 500,000 – 510,000 barrels of oil per day, or 926,000 – 962,000 barrels of oil equivalent per day (boe/d), with a disciplined capital program.
“Given the uncertain outlook for oil prices in 2026, we will continue to focus on what we can control,” Diamondback Energy said this week.
But BP’s US offshore oil and gas business, BPX Energy, isn’t doing what most others are doing.
BPX Energy plans to increase its shale output by 8% to 500,000 boe/d this year, the unit’s chief executive, Kyle Koontz, told Bloomberg in an interview published this week.
Such a volume of shale production would be equivalent to around 20% of BP’s current global oil and gas production.
In addition, BPX Energy Koontz aims to increase shale production even further, to 650,000 boe/d by the end of the decade, and to do so with as little as $800 million in capital.
“The reason it’s exciting for BP is it allows them to approve other growth projects; they can redeploy that capital to other growth,” Midland, Texas, native Koontz told Bloomberg.
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BP’s core production for the full year 2025 increased by 2.6%, mainly at BPX Energy, the supermajor said in its Q4 and 2025 earnings release.
For BP, increasing production with less capital is fundamental to avoiding the decline in upstream which has started with the 2020 commitment to become an energy giant where green energy will be the focus and upstream production will continue to decline.
However, BP, compared to other large companies, has faced a green strategy, displeased shareholders and demands for change, and seriously weakens the share price compared to its peers, and the increase in oil prices in 2022-2023.
The revolt among shareholders has been fueled by years of mounting debt and underperforming share prices, with activist hedge fund Elliott Investment Management particularly vocal in its calls for change at the supermajor.
