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BP CEO: Oil, Gas Not for Faint-Hearted

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BP CEO: Oil, Gas Not for Faint-Hearted

The United States and Russia are playing a key role in the global energy journey, BP Group Chief Executive Bob Dudley said at IHS CERAWeek Wednesday in Houston.

Dudley highlighted BP's recent sale of its Russian component, TNK-BP, to Rosneft (with BP remaining a 20-percent hold of Rosneft), making it Russia's biggest oil company and largest oil producer globally. He hopes the deal will enable BP to continue to profit from the booming Russian oil market.

The global picture is quite a contrast in between demand and supply with demand continuing to increase, Dudley noted. There's been a lot of change in where supply is coming from and estimates that global energy demand is likely to grow by more than a third between now and 2030. Emerging economies, such as China and India are likely to account for all of that growth, roughly 90 percent, according to projections made by BP's "Energy Outlook 2030" report. Gas is projected to be the fastest growing fossil fuel in the 21st century at 2 percent annually with oil growth expected to slow down to at least 1 percent per year, Dudley added.

"The world will still need around 60 million barrels a day, more in 2030, than it does today," he stated. "That increase alone is more than the 2011 combined daily production of Canada, Russia and the United Emirates."

Many of the new supplies are in places that are hard to get at, such as shale oil and gas, tight oil and gas, deepwater and the new Arctic Circle. This diversity of resources come at a price, Dudley said.

"The physical and technology risks are not the only factors, other factors range from physical regimes, geopolitical tensions and global terrorism. At BP, we are all brutally reminded of that fact just a few weeks ago when terrorists attacked our In Amenas gas facility. Our thoughts are very much with the loved ones of those who died that were employees at BP, Statoil and other involved organizations."

BP is resilient and will continue to work to bring energy for the world's consumption, Dudley said.

He went on to discuss new opportunities that are present in the United States, specifically, deepwater Gulf of Mexico production and North Dakota. North Dakota is producing over three quarters of a million barrels a day, which has surpassed Alaska's daily production and pumps more oil per day than the OPEC nation Ecuador, Dudley said.

"It isn't surprising that the world changing technologies of the last two decades were all either developed or advanced in the U.S. That is horizontal drilling and hydraulic fracturing to deep water equipment and of course the 3D and 4D seismic that is widely used around the world."

The oil and gas industry is not only changing the energy of America, but the economy of America, Dudley said. The energy industry is responsible for overall employment rising, roughly 27 percent since 2008. Dudley stated that Texas has added 180,000 jobs with Oklahoma adding 40,000 jobs and the west adding 30,000 jobs.

"It is a great renaissance, with BP being an integral part of America's energy makeup," he stated. "But it's not the only land of opportunity. We are a global company and are selecting our investments carefully. Russia is the biggest country in the world and also has the largest combined of oil gas reserves. There is enormous scope for increasing Russia's production with the country having potential to develop its own shale oil and gas."

"History in our business has favored the optimism. This is not a business for the faint-hearted or easily discouraged," Dudley said.

"There's not a nation on Earth where people aren't relying on us to deliver their energy they need to do their jobs, heat their homes, get their children to school," stated Dudley. "If there's an overall energy message, it is in business that we often talk about challenges and opportunities. What we face today in energy is a series of challenging opportunities from the shale in America to the snows in Siberia. These opportunities are plentiful, but they are also complex and difficult. The message is, considering what we have learned from recent events, is that we plan to address these opportunities both safely, responsibly and reliably."

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