BP expects oil, gas output to rise at around 4 percent per year until 2010

London (Platts)--7Feb2006

BP, the world second largest oil company, said Tuesday it expects to grow
its oil and gas production buy an average 4% per year over the next five years
and distribute about $50-bil in dividends and share buybacks by 2008.
     In a strategy update, BP said, assuming a $40/bbl oil price, output for
this year is expected to be between 4.1-mil and 4.2-mil boe/d.
     "With more than 20 new projects due on stream in the next three years,
and assuming the same level of oil price, the annual rate of increase should
continue at some 4% through to 2010," BP said in a statement.
     On top of its proven reserves, BP said it added nearly 2-bil new bbl to
its non-proven resource base last year, taking it to a total of 41-bil bbl. BP
said it expects to convert some 11-bil bbl into proven reserves by 2010. BP
reported a proven reserve base of over 18-bil boe for end-2005.
      "Based on our proven track record, we should add an extra 10 billion
barrels to our resource base from our existing exploration portfolio. It is
the quality and magnitude of this resource that underpins our expectation of
continued strong growth in output beyond 2010," CEO John Browne said in the
statement.
      BP said its policy of returning to shareholders all free cash flows in
excess of investment and dividend needs will continue and, based on a $41/bbl
oil price, expects to distribute $50-bil in dividends and buybacks between
2006 and 2008. Between 2003 and 2005, BP said it distributed a total of
$40-bil to its shareholders, some $19-bil in dividends and $21-bil in share
buybacks.
      On capex, BP said it plans spending $15-bil this year, up from $14-bil
in 2005, rising to some $16-bil in 2008. The upstream business expects to
invest around $11-bil in 2006, versus $10-bil last year. TNK-BP capex is
expected to rise from $1.8-bil to $2.5-bil.
      Browne said he also expects divestments of around $3-bil a year on an
ongoing basis as BP continues to "upgrade its portfolio."

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