Every dollar scare in oil sector, BP chief says

By Ovunc Kutlu

NEW YORK (AA) – Oil companies are finding it hard to find capital for investment in the current low price environment, but that has led to innovation and efficiency, British Petroleum (BP) chief executive Bob Dudley said Tuesday.

"Every dollar we have is scarce and we must invest it wisely and carefully. The world is now hyper competitive for capital," Dudley said at the Oil & Money Conference in London.

Crude prices plummeted from $115 in mid-2014 to below $30 per barrel in January, before recently stabilizing around $50.

Dudley said BP has already adjusted to low oil prices and emphasized that the company "can operate in the $50 range" to continue investing.

He advised other oil firms to limit costs and to be selective in potential projects.

"At today’s prices, we have to maximize efficiency and minimize costs. We have to focus on the highest quality projects and develop them with great capital discipline," he said.

He also said low prices led the industry to innovation and reform.

"There will be a good future for the most competitive businesses,” he said. “They will be businesses that can ... take opportunities to improve and strengthen safety and reliability."

The slump in oil prices is more a result of a supply glut in the global market, rather than low demand, he said, adding that he believes worldwide demand would pick up in the future.

"I don’t think demand will fall off a cliff. The issue is one of over-supply ... long-term demand will keep growing - up by about a third by 2035 on the most likely path," he said.