BP CEO Sees Oil Prices Remaining Lower for Longer

By Sarah Kent

LONDON--BP PLC is continuing to position itself for a world in which oil prices remain lower for longer, CEO Bob Dudley said Tuesday after the company reported a loss of $6.3 billion in the second quarter.

"$100 a barrel was an aberration," Mr. Dudley told reporters at the company's London office, warning that he did not expect prices to rebound in the medium term.

"It's a really tough time for the industry. It does feel like 1986," Mr. Dudley added, referring to the oil price slump that hit the industry in the late 1980s.

The company has already taken steps to cut costs and slash spending in response to the lower oil price, but maintains that it intends to do so without sacrificing growth.

It is still considering when to sanction a major project in the Gulf of Mexico after retooling it to significantly bring down costs.

Mr. Dudley said he was much more confident about moving forward with the project after reaching an agreement earlier this month to settle federal and state claims relating to the company's 2010 blowout in the Gulf of Mexico. However, he added that BP was sill considering when to approve a Mad Dog Phase 2 to best take advantage of deflation in rig costs.

Meanwhile, Mr. Dudley emphasised the company's commitment to Russia, where it holds a near-20% stake in state-controlled OAO Rosneft. The CEO highlighted that BP was deepening its engagement in the country where onshore projects look economically attractive.

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