BP promises fiscal conservatism despite rocketing oil prices

BP announced on Tuesday that it would not alter its spending plans despite rising global oil prices and was beginning preparations to approve projects for 2018 aimed at making money with prices below $40 a barrel.

Although BP is in an enviable position in terms of revenue following the 50% jump in oil prices since the halfway point of 2017 to around $70 a barrel, Bernard Looney, the head of the company's oil and gas division, said the oil giant would maintain the discipline previously displayed through deep cost cuts and more efficient work patterns.

BP had previously stated it would have an annual capital expenditure of approximately $15-17bn until 2021.

"Discipline has to remain the word and we shouldn't be seduced by the oil price," Looney said at the Baker Hughes conference in Florence.

"We're not going to say that now that the oil prices are back up, let's do more, let's spend more," he added.

As a result of the heightened price of oil, BP, which is still paying billions of dollars in penalties stemming from the 2010 Deepwater Horizon spill, is now capable of turning a profit of more than $50 per barrel.

Looney said BP would approve further investment projects throughout the year, all of which were aimed at generating profits at oil prices far below current prices.

"You'll see us continue to invest, but we will always do that when the project meets our threshold and we believe it is the best it can be," Looney said.

"It has to be resilient in what is a different world and it has got to be built to make money at less than $40 a barrel for sure," he added.

Separately, BP announced that its venturing business has invested $5m in FreeWire Technologies, a US-based manufacturer of mobile electric vehicle (EV) rapid charging systems, and has made plans to roll out FreeWire's Mobi Charger units at selected BP retail sites in the UK and Europe this year.

Tufan Erginbilgic, chief executive, BP Downstream, said: "Mobility is changing and BP is committed to remaining the fuel retailer of choice into the future. EV charging will undoubtedly become an important part of our business, but customer demand and the technologies available are still evolving.

"Using FreeWire's mobile system we can respond very quickly and provide charging facilities at forecourts where we see the greatest demand without needing to make significant investments in today’s fixed technologies and infrastructure. The opportunity also to explore options for providing charging services away from our existing retail sites makes FreeWire an ideal partner for BP.

As of 1420 GMT, shares had dropped 0.75% to 511.71p.