BP Chief’s return to Russia a harbinger of deals to come

At the World Economic Forum in Davos, Business RT spoke with BP CEO, Robert Dudley about the importance of the recent strategic agreement between BP and Rosneft and the importance of the Arctic for oil production.

RD: “Well I think this is an important signing of a strategic framework agreement that overarches the cooperation between Rosneft and BP going forward.  For BP it’s a great endorsement to see representatives from the Russian Federation government here today.  It means a lot to us, it knows that we have got the support for what I do think is the watershed agreement.  So I am very happy to be here.  I am delighted and I think both companies are, I think it’s a good deal for BP, I think it’s a good deal for Rosneft, I think it’s a watershed deal in the international oil industry, I think its good for Russia.  It’s a cross holding between two companies that aligned interests, it’s a very good thing.  I think it’s a harbinger of things, in the decades ahead, between international oil companies and national oil companies.”RT:  How important is the Arctic in terms of BP’s new oil production strategy? RD:  “With great care we’ve learned a lot about our difficulties this past year.  We are going to take that great care great responsibility of developing the arctic.  I think the Arctic has great potential.  You look at the maps in Russia.  I think its going to be great for Russia, good for the companies involved, and of course at BP we are very, very, excited about it.” RT:  Would you say it is one of your priority areas moving forward?RD: “It will be, and we have Russia as, of course, a priority area for us.  We have our very successful joint venture with TNK-BP.  We have good relations with TNK-BP – that venture will continue I think to be very prosperous and successful.  And looking out over the next decades with Rosneft in the Arctic, it’s a very high priority area.  We’re very happy about it.” RT:  Could new oil finds help to maintain production at current levels?RD:  “I think that’s right.  If you look out to the year 2030 the growth in oil production will be fairly limited.  Its value, though, will be high. The world will need 40% more energy at 2030. Its going to be something the world needs.”RT:  What about the costs, compared to say the ordinary Saudi, Texas oil.  How much more expensive could it be in the Arctic?RD:  “Well it will be expensive.  It’s offshore, it’s the Arctic. It’s different to onshore oilfields, offshore is always more expensive.  Given the care that is going to have to be taken with this it will definitely be expensive.  You couldn’t put a number on it right now – it’s hard.  We’ve put our best engineering minds on it to refine the estimates going forward.”RT:  Where is BP now in the aftermath of the Gulf of Mexico oil spill?RD:  “We have many commitments to meet there.  We have a long way to go to rebuild the trust there.  So we haven’t put it behind it.  We are deeply embedding the learnings from that experience across the company in terms of what we do everywhere around the globe.” RT:  How would you summarize your strategy moving forward? RD:  “Well I would probably say it three ways.  One we are deeply embedding safety and risk management into everything we do in the company.  We are going to meet our commitments and rebuild trust back in the company.  And then our strategy going forward to rebuild the value for shareholders in BP and the future prospects with Rosneft is part of that.”