London Guardian | June 11, 2008

The world is not running out of oil and can continue to produce hydrocarbons for the next 40 years provided restrictions are lifted on where companies can operate, the head of BP said today.

The Arctic and currently closed areas off the coast of America should be considered for exploration if rising global energy demand is to be met in future, said chief executive Tony Hayward.

He insisted that all other forms of energy, whether clean-tech or otherwise, also need to be developed simultaneously while rising carbon emissions could still be curbed.

"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," said Hayward.

"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," he added.

Some of the difficulties of access were in nations such as Venezuela, Russia and the Middle East which have adopted clear policies of resource nationalism where the state has grabbed assets previously in the hands of independent oil companies, but Hayward also noted the 92% of the US is off-limits and the Arctic needed opening up.

The BP boss was talking at the launch of his company’s annual statistical review of world energy which showed that world oil consumption grew by 1.1% in 2007, or 1m barrels a day, slightly below the 10-year average, while production fell by 0.2%, or 130,000 barrels a day, the first decline in five years.

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