British oil giant BP is cutting its annual investment budget 20% from last year’s target, to $20 billion, with senior executives predicting that it could take one or several years for oil prices to return to $80 per barrel and “three years or more for oil markets to clear out excess supply,” FuelFix reports.
U.S. production is “continuing to increase at least through the summer, even though rigs are falling very fast,” BP CEO Bob Dudley told reporters last week.
“At times, it reminds me a little bit of 1986 in terms of the potential for this to be an extended downturn,” he added. “I think any time the price of oil drops 60% it’s not a correction, it’s something different.”
BP lost $4.4 billion in profits in the last three months of 2014, with sales falling from $93.7 billion to $74 billion. In January, U.S. district court judge Carl Barbier set BP’s maximum fine in the 2010 Deepwater Horizon disaster at $13.7 billion.