He indicated that BP’s costs should fall by some $2 million in 2009. However, Mr Hayward said that BP would maintain this year’s capital spending in line with 2008, in the $20 billion to $21 billion range. BP would decrease spending in refining, marketing and alternative energy, while maintaining investment in exploration and production.
Further, BP announced that during 2008 it added 1.7 billion barrels of new oil and gas to its reserves base, a replacement ratio of 121%, excluding acquisitions and divestments. The company says that this marks the 15th successive year in which it has reported the replenishment of reserves by more than annual output.
The company said it expected to be able to grow production through to 2013 from existing projects. With year-end 2008 reserves of 18.2 billion barrels and a resource base of 43.4 billion barrels, this growth could be maintained until 2020 without any further discoveries.
At a total of 61.6 billion barrels of oil equivalent, BP’s combined reserves and non-proved resources were sufficient for 43 years of production at the same rates as last year.