BP ready to move back to the future, CEO says

BP is keen to resume its role as one of the most intrepid exploration companies in the business, chastened by its past, BP CEO Bob Dudley told a crowded audience of top energy executives and leading minds in a Wednesday morning address at IHS CERA week.

“This is not a business for the faint-hearted or the easily discouraged,” Dudley said. “And we are neither. We have strengthened our portfolio and invested for growth – here in the US, in Russia, and around the world.”

Dudley emphasized that BP plans to play a central role in the blossoming energy exploration opportunities around the world, especially in the U.S. and Russia, as well as in the deepest waters, where BP has a long history of derring do and creativity in taking on complex reservoirs.

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“What Russia and the U.S. have in common is that each will require energy investment on an epic scale, undertaken by energy partners who are not daunted by the obstacles and have the resources, experience, capability and appetite for the task,” Dudley said.

The speech comes even while BP continues to battle complex litigation with the Justice Department, former corporate partners and individuals in New Orleans over the 2010 Deepwater Horizon accident, which could last for months and lead to billions of fines for the British company.

But the calm American leader of BP steered clear of focusing on the litigation that continued to grind away even as he spoke, but reiterated the BP’s argument of shared responsibility for the accident by several companies that BP’s white-shoed lawyers are making before a federal judge.

He also mentioned the $40 billion that BP has spent or provision for the accident, implying that BP will continue to fight state and federal claims that the company should be held liable for the more serious – and far costlier – charge of gross negligence for its part in the tragic accident that killed 11 workers and spilled millions of barrels of oil.

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Dudley instead emphasized the company’s efforts to overhaul its safety systems in the last three years, noting that “we have re-structured our business to continue driving systematic and reliable operations worldwide.”

Dudley also raised the prospect of future Russian Arctic exploration, one of the remaining oil frontiers that has left Big Oil jockeying for position around the globe. BP has yet to begin exploration of the Arctic, and Shell’s troubled efforts in Alaska last year make the US look like an unlikely entry point for BP. But Russia is more promising, unsullied by Deepwater litigation and the environmental backlash.

“Russia is working very fast on its Arctic developments,” Dudley said, noting that both Russia and Norway are outpacing the US and Canada in the speed of Arctic exploration, a move he implied could give those countries an enduring competitive technology advantage. “We are glad to be a part of that.”

He focused on the bright new day for BP and Russia – and Dudley – now that the sale of BP’s former joint venture TNK-BP to Rosneft, Russia’s national oil company, is almost complete.

Dudley, who had once been barred from Russia during the height of a power struggle within TNK-BP, was nominated last week by the Russian government for a seat on the board of Rosneft, Russia’s national oil company, which is expected to complete its $55 billion takeover of TNK-BP by June 2013.

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The deal will give Rosneft control over more than 40 percent of Russia’s oil production. Under the terms of the merger, BP was allocated a 20 percent stake in Rosneft and two seats on the board, one of which will presumably by filled by Dudley.

In his speech, Dudley made a point of praising a U.S. environment that has allowed it to become the leader of the unconventional energy revolution, including mineral ownership laws that he credited with driving technology advancements.

“Almost uniquely among the nations of the world, the U.S. allows private citizens to won the mineral rights beneath their property,” Dudley said. “This gives private individuals a personal stake in energy development.”