Abu Dhabi: Major oil companies BP and Total, despite the current oil price of around $80 a barrel, are continuing to invest in current projects, said executives from the two companies on Monday.
“We are not changing our investment decisions because of this [current price],” said Bob Dudley, BP chief executive at a press conference at ADIPEC in Abu Dhabi.
However, he also said BP “will make some minor adjustments here and there” in response to global market indicator Brent crude slumping more than 25 per cent since June amid a global oversupply and weaker demand out of major markets.
Dudley said BP is able to withstand the current decline in oil prices because the feasibility of all of its current projects were benchmarked against an $80 a barrel price tag.
Although he declined to say at what point existing projects would become unviable, Dudley said the drop in oil prices can be seen as a positive as it will encourage the industry to be more “disciplined” in its spending.
Earlier, Arnaud Breuillac, Total’s president for exploration and production, told a press conference at ADIPEC the French oil major will not wind down its investments in light of lower global prices.
“We clearly do not have intentions to change immediate plans,” he said.
While warning of the impact of current oil prices on future projects, Breuillac also said that he does not believe prices will stay at $80-$85 a barrel because other oil firms, who rely on high prices for expensive projects, will be unable to bear the drop in margins for much longer.
“We are experiencing a short-term imbalance and it is unclear how long it will last, but if it last too long, some companies will cancel projects,” he said.
BP and Total are bidding for concessions tendered by the Abu Dhabi National Oil Company (ADNOC) in the Abu Dhabi Company for Onshore Oil Operations (ADCO). BP and Total are bidding alongside seven other Western and Asian oil firms for a series of concessions from the state oil firm.
Dudley confirmed the deadline on the offers has been extended until the end of the year.
“We are deadly committed to our work here in Abu Dhabi,” he said.
Breuillac made similar comments in saying, “We are committed to Abu Dhabi and to our partnership with ADNOC.”