Tough times ahead for BP — Lord Browne

 LORD BROWNE, the chief executive of oil giant BP, has warned the current trading environment is difficult and “unusually uncertain”.

The group came under fire from environmental activists at its annual meeting, and Lord Browne’s speech was disrupted by campaigners protesting about the group’s ethical record. A stink bomb was also thrown at the entrance to the Royal Festival Hall in London, where the meeting was held, despite a large security presence including 60 police officers, who barred protesters from entering the hall. Once order had been restored, Lord Browne warned the outlook for crude remains uncertain because prices, which were driven higher earlier this year because of a strike in Venezuela and the war in Iraq, have now fallen back to levels seen last year.

Lord Browne said BP’s market-facing businesses — refining, retail and petrochemicals —have been affected by weaker economic growth and rising feedstock costs. Although these effects might reduce during the coming year, it looks unlikely that margins will exhibit sustained strength, he said. Browne said the market for natural gas in the United States was fundamentally strong, “which is helpful given our position as the largest producer of gas in North America”. Peter Sutherland, the group’s chairman, said: “Whether or not BP will have any involvement in Iraq remains to be seen. It is not part of our current strategy, and what I will say is that there will be no involvement without the support of an Iraqi government recognised by the world community and the Iraqi people.” Lord Browne said BP will invest around 6.3 billion pounds in its upstream business in 2003, and over the next five years, over 50 percent of investment in upstream will be put into the five new material profit centres in the deep water Gulf of Mexico, Trinidad, Angola, Azerbaijan and Asia Pacific.