Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Opec decision calms BP chief Bob Dudley’s nerves, sees oil price stability on horizon

BP chief executive Bob Dudley
BP chief executive Bob Dudley

Speaking exclusively to Energy Voice, oil boss Bob Dudley revealed OPEC’s decision helped strip away his “nervousness” around planning his business strategy around $55 next year.

Mr Dudley originally coined the phrase doing business “lower for longer”, which later became the industry’s two-year mantra.

“I would say it’s lower for longer but not forever,” he said.

“The agreements of last week for OPEC are significant. I was in the Middle East about four times the month before. I had a feeling they were all trying to make it work but I wasn’t sure if they would. Who could be sure? But it really took the Russians as well and their involvement to make it happen. I think it’s really important for Scotland that that agreement was made. For some time we’ve been planning 2017 on $55, but I have to say I was getting a little nervous, but I think now planning on $55 for next year is very reasonable.”

The oil boss was in Aberdeen for his first time in five years when he sat down with Energy Voice.

The operator revealed it was planning to double its North Sea production to 200,000 barrels of oil a day by 2020.

“So much of the hard work has already gone through,” he said.

“There will be tough times ahead. The amount of drilling in the North Sea will still be down and I don’t think all of the companies’ cost structures are where they need to be yet. It’s not like the party is on again, but we’re heading in the right direction because the industry has shown a lot of discipline.”

However, the oil leader said he was starting to see oil price stability on the horizon.

“I can start to see the stability in the oil price and that is to do with massive oversupply, which has existed, including the daily production,” he said.

Mr Dudley said OPEC’s decision will see a slight rise in the commodity price.

“If you look at it on a daily basis it looks like the amount of oil produced and consumed − supply and demand – is roughly in balance today,” he said.

“There’s not a lot of surplus production that is out there. However, the stock levels are enormous.

“The inventories are very high and it will take 18 months to a couple of years to work off the stocks. At some point sentiment will change. There is about $1.4trillion of investments in oil and gas, which has either been deferred or cancelled at some point that will catch up. I can see a gentle rise in the price of oil that is not dramatic. I don’t think OPEC would like to see a dramatic rise in the price of oil, because you wouldn’t want to open up the shales of the US again to flood the market.

“There’s a balance point here. We’re looking at between $50 and $60 this year and next year. The industry is really good at adjusting cost structures historically. I’ve been through this four times now. There will be a struggle for some of the fields to be competitive because they’re in late life, so we all have to get our houses in order to balance at $55.”

BP is planning to drill five new exploration wells in the North Sea next year and 50 development wells over the next three years. Read more here.


Recommended for you

More from Energy Voice

Latest Posts