London (Platts)--3Mar2009

UK oil major BP said Tuesday it can maintain an average oil and gas
production growth of between 1-2%/year until 2020 without any further
discoveries after replacing 121% of its production last year.

In a strategy update, BP said it added 1.7 billion barrels of new oil and
gas to its reserves base last year, taking its year-end 2008 reserves to 18.2
billion barrels and a resource base of 43.4 billion barrels.

Last year, BP said it expected to see production of 4.3 million b/d of
oil equivalent by 2012 with sustainable output of at least 4 million boe/d
until 2020.

Without confirming the targets, BP said it expects to be able to grow
production through to 2013 from existing projects.

Last year, BP produced 3.838 million boe/d, slightly higher than
2007.

On costs, BP said it held costs flat in 2008, despite the rise in oil
prices for most of the year, and expects to see its costs fall by around $2
billion in 2009.

In its statement, BP also said "there is a good chance" its downstream
business will return to profitability in 2009, after a $700 million loss last
year, with its Texas City refinery in the US having resumed full operations.

On capex, BP reiterated a target to keep this year's capital spending
broadly in line with 2008, at between $20 billion and $21 billion. BP said it
expects lower spending in refining and marketing and alternative energy while
maintaining investment in exploration and production.
--Robert Perkins, robert_perkins@platts.com