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BP boss 'happy' with portfolio

Published 16/04/2015

BP Group Chief Executive Bob Dudley.
BP Group Chief Executive Bob Dudley.

BP boss Bob Dudley has indicated that the oil giant has no regrets over rival Royal Dutch Shell's £47 billion takeover of BG as he faced shareholders at its annual general meeting.

The recently-announced deal has prompted speculation that a weakened BP - described as being like a "tired horse" by one private investor at the meeting - could itself become a bid target.

Mr Dudley was pressed over reports that it had baulked at buying BG itself a few years ago, and whether this was a mistake.

But he said: "We are really happy with our portfolio.

"I think it is not the thing for BP to have done."

Chairman Carl-Henric Svanberg played down the idea of more consolidation in the industry amid speculation about the likes of Exxon moving for BP.

He said: "It is not a given that if you take two oil majors and out them together you have enough synergies to make them stronger."

The sector is under pressure because the price of oil has fallen by half since last summer, with BP also still counting the cost of 2010's Deepwater Horizon blow-out.

The disaster, which killed 11 workers and spilled millions of barrels of oil into the Gulf of Mexico, has so far cost it 43.5 billion US dollars (£29 billion).

BP earlier this year said it was adjusting to the "new reality" of lower oil prices as it reported a 66% fall in annual replacement cost profit for 2014.

It said it would cut investment this year by up to six billion US dollars (£4 billion).

Mr Svanberg told the AGM: "The world has turned into a much more turbulent place.

"The price of oil has gone back to its old volatile ways after four years of relative stability.

"It may take a while before the supply and demand gets back in balance and we are not assuming any quick price recovery."

Meanwhile, BP was challenged over its investment in Russia's Rosneft with one shareholder claiming it breached the spirit of sanctions over Ukraine and urging the company to pull out.

It was also challenged over its involvement in Colombia and Azerbaijan, as well as claims it backed vocal climate change sceptics.

But Mr Svanberg said: "We are not running our own foreign policy department.

"We are in many difficult countries and these are mainly long-term projects."

Before the meeting, shareholders had been urged by advisory body PIRC to vote against Mr Dudley's 15.3 million US dollar (£10.4 million) pay package.

It had described the sum as "excessive" and that changes in the chief executive's pay over the last five years "are not considered in line with the company's financial performance over the same period".

But there were no questions from shareholders over Mr Dudley's pay, and only 11% voted against the remuneration report compared to 16% last year.

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