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BP CEO: Mega oil merger not compelling

Chicago Daily Herald

Bloomberg News

Published: 2/3/2009 2:29 PM

The logic for a possible mega merger between international oil companies isn’t a terribly compelling, BP Plc’s Chief Executive Officer Tony Hayward said.

The challenge for international oil companies, or IOCs, such as BP and Exxon Mobil Corp., is to continue to capture resource to enable us to grow, Hayward said on a conference call with reporters today. It may be more sensible to think about combining IOCs with technology and capability with national oil companies with resources, he said.

Large swathes of the world’s oil reserves are off-limits to BP and its peers, Hayward said in June, limiting their ability to raise production. National oil companies, such as Saudi Aramco and Petroleos de Venezuela SA, currently own about 80 percent of the world’s reserves, according to his estimates.

London-based BP spent a total of $30.7 billion last year, of which $21.7 billion on projects. It bought assets from Chesapeake Energy Corp. and carried out a transaction with Husky Energy Inc., the British company said today.

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