Dec. 9 (Bloomberg) -- BP Plc, Europe's second-biggest oil company, may increase its investments in China by ``several times'' to benefit from rising domestic energy demand even as the global economy slows.

``I want to see BP expanding its current investments in China by several times over the medium term,'' Chief Executive Officer Tony Hayward said in a speech posted on the Web site of the company's China unit yesterday. BP has invested more than $4.6 billion in the world's fourth-largest economy, he said.

Developing economies led by China and India are likely to account for all of the oil demand growth this year, Hayward said in a speech at Qinghua University in Beijing on Nov. 25, according to BP China. BP is ready to benefit from the ``opportunities that may well arise from a downturn'' and is in a position to cope with volatile oil prices, Hayward said Oct. 28.

Crude-oil prices in New York touched $40.50 a barrel on Dec. 5, the lowest since Dec. 13, 2004, as the global slowdown cuts demand for raw materials. That's a 72 percent fall from the record high of $147.27 a barrel reached in July.

``Despite the recent price declines, 2008 will be the seventh consecutive year in which oil prices have increased,'' Hayward said on Nov. 25.

Oil prices ``will probably settle at a higher level than we have been accustomed to historically,'' Hayward said. ``There's a strong case that says the era of a cheap energy is over -- at least for the medium term,'' he said.

BP in China

BP has operated in China for more than 30 years and was one of the earliest foreign invested enterprises in the country. The oil and petrochemicals producer has more than 30 joint ventures and wholly owned companies in China and over 4,000 staff, data on BP China's Web site showed.

London-based BP and China Petrochemical Corp., the nation's biggest oil refiner, will invest 3.5 billion yuan ($509 million) to almost triple the capacity of a chemical plant in southwestern China, the Chinese company said in January.

The U.K. oil explorer and Sinopec Group's Hong Kong-listed unit China Petroleum & Chemical Corp. have joint chemicals ventures in the eastern cities of Shanghai and Nanjing.

BP has a 30 percent stake in China's first liquefied natural gas importing terminal in the southern province of Guangdong, which is majority owned by the nation's biggest offshore oil producer China National Offshore Oil Corp.

Chinese oil demand is forecast to rise 3.7 percent to 8.2 million barrels a day in 2009, the International Energy Agency said in its November report.

To contact the reporter on this story: Wang Ying in Beijing at ywang30@bloomberg.net.

Last Updated: December 9, 2008 00:27 EST