BP: Low Oil Prices Could Last 3 Years

by Ship & Bunker News Team
Thursday January 22, 2015

BP CEO Bob Dudley Wednesday said that investment strategies must be revisited on the basis that oil prices might not rise for three years, BBC reports.

"Companies like us, at BP, we're going to need to rebase the company based on no guarantees at all that the price will come back up," he said.

"We have got to plan on this [price] being down, and we don't know exactly what level, but certainly a year, I think probably two and maybe three years."

Dudley explained that the economics of a number of investments, such as higher cost extractions in the North Sea, have changed.

BHP Billiton and Total also both said they would be cutting back investment, particularly in shale oil projects.

Meanwhile, the Governor of the People’s Bank of China added that low oil prices could dampen efforts towards developing renewable energy sources in the country.

"We worry a little bit that the price signal may give disincentive for new energy types to develop and could reduce investment in new non-fossil energy,” said Zhou Xiaochuan.

But he said low oil prices were good news for the Chinese economy overall.

ENI’s CEO told a Davos audience that in responding to low oil prices by cutting investments, oil prices would rise in the longer term, maybe as high as $200 bbl within five years.

Ship & Bunker News Team
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