BP CEO: Recent Deals Reflect Disciplined Investment Strategy

By Elena Cherney

DAVOS, Switzerland--BP PLC's (BP) recent moves to invest in oil and natural gas fields off Africa, Egypt and in Indonesia and Abu Dhabi highlight the company's push to be selective about new investments as the industry recovers from the two-year price rout, the company's chief executive said Tuesday.

Bob Dudley, speaking in an interview on the sidelines of the World Economic Forum meeting, cited the string of deals as well as BP's deal to buy a stake in the Trion oil field in the Gulf of Mexico as examples of a more disciplined investment strategy.

"We'll be very selective," he said. "What we don't want to do is lose the discipline we've built in…There are some things we're just not doing," he said.

For example, expensive projects such as deepwater exploration will be undertaken only if infrastructure is in place to serve them, he said. Some of the most carbon-intensive projects, such as Canadian oil sands, would also not meet the bar, he said.

Natural gas projects feature heavily in the company's plans as part of a shift from oil to gas, which Mr. Dudley said is part of the "move to lower-carbon energy."

Mr. Dudley said the company is now in a position to invest because it has settled most of the liabilities stemming from the fatal 2010 explosion of the Macondo platform in the Gulf of Mexico.

Mr. Dudley added he is confident that crude oil markets are rebalancing following agreement by the Organization of the Petroleum Exporting Countries and non-OPEC producers to limit production, reached late last year. He said that producers, including Russia, who were party to the deal appear to be respecting its terms and cutting their output.

Earlier, Saudi Aramco CEO Amin Nasser also spoke about investment plans, telling an audience that Saudi Arabia is building out its capacity, as part of an investment push that is necessary to avoiding future price spikes. "If there is no investment, prices will spike," Mr. Nasser said.

-Write to Elena Cherney at [e-mail]

(END) Dow Jones Newswires

January 17, 2017 07:10 ET (12:10 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.