BP chief executive Tony Hayward stressed the company’s commitment to the North Sea during its results press conference this week, saying it would continue to produce there “until we put the lights out”. When I asked him when that would be, Mr Hayward said production would continue for at least 15-20 years, but that this would depend on the tax regime. The province faces declining production and rising costs, he said, so “the fiscal structure needs to continue to develop to ensure that all of the marginal barrels are developed”. So it seems BP’s commitment to the North Sea is absolute — provided the government cuts the tax take.
Asked whether he agreed with Shell chief executive Jeroen van der Veer’s judgment that “easy oil” would peak by 2015, Mr Hayward said “The question I always have in my mind is what’s conventional and what’s non-conventional. My personal view is that peak oil will occur more likely driven by demand than supply, and I don’t expect that to occur in 2015”. The idea that peak oil will be driven by demand not supply echoes exactly what Lord Browne told me in Abu Dhabi recently — so there seems to be no change in BP’s position on peak, despite the change in chief executive.
David Strahan is author of The Last Oil Shock: A Survival Guide to the Imminent Extinction of Petroleum Man, and a trustee of ODAC.