Saudi Aramco, BP Say Oil Slump Won't Hit Investment Plans--Update

(Adds BP comment on investment plans)

 
   By Summer Said and Sarah Kent 
 

ABU DHABI--Major oil producers BP PLC (BP) and state-owned Saudi Arabian Oil Co. are set to continue with their substantial investment plans, despite the recent slump in oil prices, senior officials from the two companies said Monday.

Oil prices have fallen more than 25% since June to just above $80 per barrel amid ample supply and slowing global demand growth, raising a big question mark over the profitability of some projects.

"We have only sanctioned or approved projects based on an $80 [a barrel] oil price," BP's Chief Executive Robert Dudley said during an energy conference in Abu Dhabi. "We've been doing that for three or four years so there isn't any project that we're working on today, particularly those big capital projects, that we have any different view of."

Saudi Aramco's upstream vice president Amin Nasser said the company intends to maintain its plans to invest $40 billion a year over the next 5 years.

"I am confident that the long-term demand fundamentals remain robust, and our industry must remain focused on meeting this long-term demand," Mr. Nasser said.

Saudi Arabia--the largest oil producer within the Organization of the Petroleum Exporting Countries--has historically acted as a swing producer, cutting its output to prop up prices. However, it also enjoys some of the lowest production costs in the industry and presently appears more interested in protecting its own market share than balancing the market.

-Write to Summer Said at [e-mail] and Sarah Kent at [e-mail]

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