BP said its coined “lower for longer” downturn theme did not mean it believed it would be “lower forever”.
Instead the mega operator argued the world needed the industry.
Speaking at today’s Offshore Technology Conference (OTC) opening session, BP’s chief executive of upstream Bernard Looney asked the delegation: “Is this price shock different than the others? Is it lower for longer, or is it lower forever?”
The company leader admitted it was forced to make hard decisions and let some “very good people” go.
However, he countered: “Let me be clear. At BP, we don’t think that it is lower forever.”
He added: “Improving productivity is the best insurance we can have for whatever future you chose to believe in.”
Increasing the margins are critical to meeting demand, according to Looney.
A demand BP thinks will rise by 33% in 2035. The operator also believes oil and gas will be forced to make up half the world’s energy needs then.
But waiting for a recovery in oil price was not the way to right the industry’s wrongs, according to Looney.
He said:“We have to get more competitive as an industry. People have said the oil price could sort things out, and I think that would be a mistake.”
Instead, recovery will act as proof of whether or not the industry has managed to successfully steady the course.
He added: “We have to change the mindset and not accept a cost structure that trends up with the oil price.
“We need to get a little better in everything we do every day. And we have to hold onto this even when the oil price recovers. That’s when the true test will come.”
He added: “The world needs this industry.”
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