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| BP boss Bob Dudley: Oil prices 'low for up to 3 years' | BP boss Bob Dudley: Oil prices 'low for up to 3 years' |
| (about 14 hours later) | |
| The boss of oil giant BP Bob Dudley has said that oil prices could remain low for up to three years. | |
| He added that could send UK petrol prices below £1 per litre. | He added that could send UK petrol prices below £1 per litre. |
| He told BBC Business editor Kamal Ahmed in Davos BP was planning for low oil prices for years to come. | He told BBC Business editor Kamal Ahmed in Davos BP was planning for low oil prices for years to come. |
| That is expected to lead to job losses and falling investment in the North Sea oil industry and elsewhere, curbing supply and eventually forcing the price back up. | That is expected to lead to job losses and falling investment in the North Sea oil industry and elsewhere, curbing supply and eventually forcing the price back up. |
| Italian oil group Eni has said the next spike could be around $200 a barrel. | Italian oil group Eni has said the next spike could be around $200 a barrel. |
| Eni's chief executive, Claudio Descalzi, said the oil industry would cut capital spending by 10-13% this year because of slumping prices. | Eni's chief executive, Claudio Descalzi, said the oil industry would cut capital spending by 10-13% this year because of slumping prices. |
| He said that would create longer-term shortages and sharp price rises in four to five years' time, if the Opec cartel fails to cut supplies. | He said that would create longer-term shortages and sharp price rises in four to five years' time, if the Opec cartel fails to cut supplies. |
| Mr Descalzi was speaking at the World Economic Forum in the Swiss resort of Davos. | Mr Descalzi was speaking at the World Economic Forum in the Swiss resort of Davos. |
| £1 per litre | £1 per litre |
| Mr Dudley said historically world oil prices have fluctuated, and sometimes have remained low for a number of years. | Mr Dudley said historically world oil prices have fluctuated, and sometimes have remained low for a number of years. |
| He expects to see current low prices for at least a year, and that BP has to plan for that. | He expects to see current low prices for at least a year, and that BP has to plan for that. |
| "Companies like us, at BP, we're going to need to rebase the company based on no guarantees at all that the price will come back up," he said. | "Companies like us, at BP, we're going to need to rebase the company based on no guarantees at all that the price will come back up," he said. |
| "We have go to plan on this [price] being down, and we don't know exactly what level, but certainly a year, I think probably two and maybe three years." | "We have go to plan on this [price] being down, and we don't know exactly what level, but certainly a year, I think probably two and maybe three years." |
| From 2010 until mid-2014, oil prices around the world were fairly stable, at around $110 a barrel. | From 2010 until mid-2014, oil prices around the world were fairly stable, at around $110 a barrel. |
| However, since June prices have more than halved. Brent crude oil is around $48 a barrel, and US crude is around $47 a barrel. | However, since June prices have more than halved. Brent crude oil is around $48 a barrel, and US crude is around $47 a barrel. |
| Mr Dudley said lower oil prices could mean UK petrol could fall below £1 per litre. This kind of petrol price was "not far off", despite taxation forming a part of the fuel price. | Mr Dudley said lower oil prices could mean UK petrol could fall below £1 per litre. This kind of petrol price was "not far off", despite taxation forming a part of the fuel price. |
| "If prices keep going down, I'm sure you will [see £1 per litre]," he added. | "If prices keep going down, I'm sure you will [see £1 per litre]," he added. |
| North Sea job losses? | North Sea job losses? |
| Sustained low oil prices are also likely to cause "stress" on oil producing countries such as Norway, Russia, Venezuela, Scotland, Nigeria and Angola, he said. | Sustained low oil prices are also likely to cause "stress" on oil producing countries such as Norway, Russia, Venezuela, Scotland, Nigeria and Angola, he said. |
| "All these countries are really going to feel it," he said. "I think Scotland is going to be under some stress because of these low oil prices," he said. | "All these countries are really going to feel it," he said. "I think Scotland is going to be under some stress because of these low oil prices," he said. |
| BP has two large projects in the North Sea, including the Clair field, which have had £8bn investment over ten years, he said. | BP has two large projects in the North Sea, including the Clair field, which have had £8bn investment over ten years, he said. |
| "Their economics are challenged now with these new prices," he added. "But we're in the North Sea for the long term. We have a large workforce in Scotland. There will be activities that we needed to pare back anyway." | "Their economics are challenged now with these new prices," he added. "But we're in the North Sea for the long term. We have a large workforce in Scotland. There will be activities that we needed to pare back anyway." |
| The fallout from "difficulties in the US" - referring to the fatal explosion at the Deep Water Horizon oil rig - were affecting the business, he said. | The fallout from "difficulties in the US" - referring to the fatal explosion at the Deep Water Horizon oil rig - were affecting the business, he said. |
| Globally, BP and the rest of the energy industry were likely to see "significant workforce reductions," he added. | Globally, BP and the rest of the energy industry were likely to see "significant workforce reductions," he added. |
| Oil price worries | Oil price worries |
| Italian oil group Eni chief Mr Descalzi called for Opec to cut production. | Italian oil group Eni chief Mr Descalzi called for Opec to cut production. |
| He said: "Opec is like the central bank for oil which must give stability to the oil prices to be able to invest in a regular way." | He said: "Opec is like the central bank for oil which must give stability to the oil prices to be able to invest in a regular way." |
| Politicians, economists and industry leaders in Davos have been voicing their worries over the impact of lower prices. | Politicians, economists and industry leaders in Davos have been voicing their worries over the impact of lower prices. |
| Total and BHP Billiton both said on Wednesday that they would cut back on shale oil projects. | Total and BHP Billiton both said on Wednesday that they would cut back on shale oil projects. |
| People's Bank of China governor Zhou Xiaochuan said low oil prices could slow down China's development of renewable energy projects. | People's Bank of China governor Zhou Xiaochuan said low oil prices could slow down China's development of renewable energy projects. |
| He said: "We worry a little bit that the price signal may give disincentive for new energy types to develop and could reduce investment in new non-fossil energy," | He said: "We worry a little bit that the price signal may give disincentive for new energy types to develop and could reduce investment in new non-fossil energy," |
| But he added that lower prices would be good for the economy and job creation, because China was dependent on imported oil and gas. | But he added that lower prices would be good for the economy and job creation, because China was dependent on imported oil and gas. |
| Opec's decision | Opec's decision |
| Opec secretary general Abdullah al-Badri, also speaking at Davos, defended the group's decision not to cut output. | Opec secretary general Abdullah al-Badri, also speaking at Davos, defended the group's decision not to cut output. |
| He said: "Everyone tells us to cut. But I want to ask you, do we produce at higher cost or lower costs? | He said: "Everyone tells us to cut. But I want to ask you, do we produce at higher cost or lower costs? |
| "Let's produce the lower cost oil first and then produce the higher cost," | "Let's produce the lower cost oil first and then produce the higher cost," |
| "We will go back to normal very soon," he said. | "We will go back to normal very soon," he said. |
| Oil prices have sunk by almost 60% since June to below $50 a barrel because of a large supply glut. | Oil prices have sunk by almost 60% since June to below $50 a barrel because of a large supply glut. |
| The price slide accelerated after Opec decided in November not to cut production. | The price slide accelerated after Opec decided in November not to cut production. |