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The Press Association: BP eyes performance boost

27 February 2008

BP chief executive Tony Hayward has said the oil major could pump four million barrels of oil a day until 2020, without the need for any fresh discoveries.

But the company expects to exceed this with one billion US dollars (£502 million) due to be spent this year on exploration as well as through access to new sources in Libya, Oman, Colombia and Canada, Mr Hayward told City analysts.

The company’s reserves currently stand at 17.8 billion barrels and the company expects to pump 4.3 million barrels a day by 2012, he added.

Mr Hayward also outlined plans to add up to four billion US dollars (£2.01 billion) to the oil major’s profits through a far-reaching overhaul of the business.

The giant revealed a 22% fall in 2007 profits to 17.29 billion US dollars (£8.76 billion) earlier this month, but Mr Hayward said BP now had a “clear, step-by-step plan” to close the gap on rival Royal Dutch Shell.

The chief executive said the firm would boost profits in the next three to four years through restoring and upgrading BP’s problem-hit US refineries.

Its Texas City refinery – rocked by an explosion which killed 15 workers in 2005 – will see additional capacity back on stream within weeks, Mr Hayward added.

The chief executive told analysts that he had carried out one of the most wide-ranging reviews in BP’s recent history since succeeding Lord Browne, who resigned last May after lying to a court in a bid to prevent newspaper stories about his private life.

Profits should also be boosted by more rigorous investment decisions, and cutting overheads across the business by up to 20%.

BP announced 5,000 job cuts earlier this month – including 1,500 in the UK – and has already moved to take 9,500 jobs off the payroll in the US after franchising its retail business. Mr Hayward is shedding around 13% of his wider management team with the focus on beefing up front-line expertise with the recruitment of more than 2,000 engineers.

Copyright © 2008 The Press Association. All rights reserved.

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