BP has noted in its review that the world’s fossil fuel resource base remains sufficient to support growing levels of production but the continued weakness in oil supply and increasing demand outside the Organization for Economic Co-operation and Development (OECD) also highlight the challenges that the industry faces in maintaining secure energy supplies.
According to the review, world economic growth was strong in 2007, despite financial market turmoil, and this continued to support global energy consumption. Although growth in primary energy consumption slowed in 2007 compared to 2006, at 2.4% it was still above the 10-year average for the fifth consecutive year.
The review observed that oil price has been on an upward path for more than six years, which according to BP’s data series going back to 1861, is the longest period of rising prices on record.
Mr Hayward said: Declining oil production in the OECD highlights the fact that, while resources are not a constraint globally, the resources within reach of private investment by companies like BP are limited. Political factors, barriers to entry, and high taxes all play a role here. In other words, when it comes to producing more oil, the problems are above ground, not below it. They are not geological, but political.
