BP CEO sees long-term drop in oil prices

Oil prices could drop to about $40 a barrel in the medium term as new supplies are found, and might fall even further in the long term, the chief executive of BP PLC said, according to an interview published June 12.

BP CEO Lord Browne cautioned that “we cannot really expect that prices will drop back sharply in the short term,” the interview with German weekly Der Spiegel said.

However, he noted that large new oil fields are still being found and that regions such as West Africa have significant oil supplies, the report said.

Browne said sources such as Canada’s oil sands also can be tapped profitably, adding that production costs still amount only to a small proportion of the price.

“It is very likely that, in the medium term, prices will stand at about $40 on average,” Browne was quoted as saying. “In the very long run, even $25 to $30 are possible.”

Oil prices have soared recently, pushed up notably by tensions over Iran’s nuclear ambitions. Iran said June 11 it had accepted some parts of a Western offer aimed at getting it to drop its nuclear program, but rejected others.

Light sweet crude for July delivery was up 36 cents June 12 to $71.99 a barrel in electronic trading on the New York Mercantile Exchange.

—The Associated Press