- Costs have fallen 15% to 20%, Head of Exploration Herbert says
- But BP’s oil-sands projects aren’t `going anywhere very fast'
The costs of developing and producing crude in Canada’s oil-sands is falling quickly, helped by a depreciating local currency and deflation, said BP Plc’s Head of Exploration Richard Herbert.
“There is an enormous amount of cost coming out of these projects,” Herbert said during a speech at a conference in Banff, Alberta. Still, those costs haven’t fallen far enough, and BP’s own oil-sands projects aren’t “going anywhere very fast at the moment.”
BP and global peers including Royal Dutch Shell Plc have responded to slumping oil prices by cutting spending and selling assets. Costs have fallen about 15 percent to 20 percent, after rising threefold over the past 15 years, Herbert said.
Oil prices that have tumbled 50 percent in a year have further to fall and won’t recover any time soon as supply swamps demand, Peter Mather, BP’s group regional vice president for Europe and head of U.K., said Thursday at a conference in Brussels.
Europe’s No. 3 oil producer has long held a bearish market view, with Chief Executive Officer Bob Dudley and his colleagues predicting a prolonged slump at least six times this year.