BP CEO says oil prices could bottom out in early 2016

BP CEO Bob Dudley said that the slump in global oil prices could bottom out early this year, adding that prices will likely remain low for the next two years.

In a BBC radio interview on Saturday the BP boss said that “a low point could be in the first quarter [of 2016].”

In 2015 Brent crude dropped 34 percent after a 48 percent plunge the year before. The drop in global oil prices was caused by a global oversupply and slowdown in the Chinese economy.

“Prices are going to stay lower for longer, we have said it and I think we are in this for a couple of years. For sure, there is a boom-and-bust cycle here,” Dudley said.

The main talking point of the radio interview was BP’s giant oil spill from a rig off the US coast in 2010.

BP Deepwater Horizon Oil Spill

The US Government estimated the total discharge at 4.9 million barrels (210 million US gal; 780,000 m3). It had a significant environmental and financial impact across five states: Louisiana, Texas, Mississippi, Alabama and Florida.

Dudley was quoted by the BBC as describing the fire on the Deepwater Horizon and its aftermath as a “near death experience” for the company. In July 2015, BP agreed to pay $18.7 billion in fines, the largest corporate settlement in U.S. history.

“Sometimes it takes a near death experience to radically change a company. It was a forced focussing down of what we do, it was this is what we need to do to survive.”

Bob Dudley BP CEO

Bob Dudley,  born in Queens, New York, became BP group chief executive on 1 October 2010. 

Dudley also said that he did not agree with BoE governor Mark Carney’s use of the term ‘standard assets’ to describe oil and gas reserves due to strict targets to cut CO2 emissions.

“I think the term overstates it quite frankly and I have spoken to the governor about it and I have questioned that term,” Dudley said in the interview.