BP chief says era of cheap fuel over
BP Plc Chief Executive Officer Tony Hayward said the era of cheap energy is over as oil production isn't rising fast enough to meet demand amid a lack of spending.
The energy industry is facing the challenges of climate change and ways of increasing supplies, Hayward said at the Asia Oil and Gas Conference in Kuala Lumpur yesterday.
"Producers are being hampered by 25 years of low investments, because of low prices," he said.
Exxon Mobil Corp, Royal Dutch Shell Plc, BP, Chevron Corp, Total SA and ConocoPhillips will spend a record $98.7 billion this year on exploration and production, Lehman Brothers Holdings Inc estimates. Costs more than quadrupled since 2000 as explorers targeted more challenging reservoirs and demand rose for labor and materials.
If the industry is able to increase oil-recovery rates 5 percent above the current 35 percent, it would add about 170 billion barrels or five years' supply to global reserves, he said.
Taxes and government share of oil and gas revenue have continued to increase across the world, hampering investments by explorers and producers, he said.
Agencies
(China Daily 06/10/2008 page17)
