Citi has reiterated its buy rating on BP PLC (LSE:BP.) after the company released more details about its Bumerangue oil discovery offshore Brazil, which the bank believes could prove transformational.
The discovery, first announced in July, lies in the Campos Basin and is now thought to contain several billion barrels of light oil and condensate, according to Citi’s interpretation of the new geological data.
The bank said BP’s latest technical disclosures support the view that Bumerangue could be a “multi-billion barrel liquids discovery,” with the potential to materially reshape the group’s upstream portfolio.
Crucially, BP holds 100% ownership of the block, giving it full control over development decisions and any future partnerships.
Citi described that combination of scale and equity as “a rare and highly attractive proposition” among current global discoveries.
While the bank cautioned that appraisal drilling and commercial testing will be needed to confirm recoverable volumes, it said the initial results reinforce BP’s strategy of focusing on higher-margin, lower-carbon barrels in regions with fiscal stability and existing infrastructure.
Citi kept its 'buy' rating and 475p price target, saying Bumerangue strengthens BP’s medium-term growth story at a time when investor sentiment toward traditional exploration remains subdued.