BP is pushing its North Sea operating costs down to $12 per barrel, chief executive Bob Dudley said.
The oil major was topping at $30 a barrel when oil was at an all-time high.
“The North Sea is one of four big operation hubs around the world,” he said.
“We have a position where we have the acreage and the projects, which have been there for long time, so we have lots to work on. The teams have done a great job at bringing the costs down. We have shrunk our capital by 40%.”
“The cost structure has been historically high in the North Sea even at $100 oil and even certainly now at these costs.
“I hope we have approached the contractors in the right way and said ‘look here’s our problem’ and they’ve said ‘here’s our problem’ and let’s kind of work and share together, and it’s amazing how the costs come out to everybody’s benefit versus just cutting costs.”
He added: “Our operating costs were high to be honest and they are now down to the mean level, which is about $17 per barrel.
“Now we’re going to target $12, and that will come from higher production rates, which will help the per-barrel cost, but also continuing to work with our suppliers, because we can’t just say cut your costs.
“We have to figure out how to do it together. If I’m honest I think we’re still too complicated as a company. We have to solve our own problems about being slightly too bureaucratic, but we’ve come a long way.”
Speaking at the Southern North Sea Conference at the time he said: “That’s still high by North Sea standards and certainly very high by international standards. “I think without any compromise on safety, we can actually go a lot further. It’s going to come through this different kind of collaboration.”
As well as cutting its operating costs, BP has invested a record $1.8billion, with its partners, in the North Sea in the past year.
“You have to spend your capital very, very carefully in a downturn,” Dudley said.
“The costs have come down and made things economic that originally weren’t, so if you can time it right and do it in the downturn then you can do it very efficiently. It is a good time invest, but again we have had to be very selective with our capital, so I think it should be seen as a really positive sign that we’re doing in the North Sea.”
The BP boss exclusively revealed to Energy Voice that they would double production in the North Sea. Read more here.