BP Chief Says Worst Is Over

BP is piling up assets with more than $3 billion of deals in three days as CEO Bob Dudley sees the company emerging from the doldrums after a two-year price slump.

Since Saturday, BP has announced a $2.2 billion expansion of output in Abu Dhabi and a $916 million investment in fields in Mauritania and Senegal. That brings its 2016 acquisitions to more than $3.8 billion, the highest in four years, according to data compiled by Bloomberg.

The spending spree may herald a return to growth for Dudley, who has spent most of his six-year tenure divesting assets to pay for the catastrophic Gulf of Mexico oil spill in 2010, for which BP set aside more than $50 billion. Europe’s No. 3 oil company, a third smaller since then, plans to start seven or eight major projects next year as crude prices recover from their worst collapse in a generation.

“It’s time for BP to start growing,” Dudley, 61, said in a Bloomberg Television interview in Abu Dhabi. “We’ve walked through so many difficulties in the US that I think the company now is well-positioned for growth.”

BP shares have risen almost 40% this year. Notwithstanding a slide in the next few weeks, that would mark the stock’s best year since 1993. Its larger European competitors have also performed well, with Royal Dutch Shell adding almost 50% and Total SA about 16%. “The market was questioning their ability to grow post-2020 and these are the resource-sustenance deals they were looking for. The timing of these deals is also interesting, coming at a time oil prices are rising," said Brendan Warn, a managing director at BMO Capital Markets in London.

In a further sign of confidence, BP this month approved the $9-billion expansion of its Mad Dog deepwater project in the Gulf of Mexico, not far from the site of the oil spill.

BP says it can cover spending and dividends without having to borrow at a price of $50 to $55 next year, down from an earlier estimate of $60.