BP Chief Says Era of Cheap Oil is Over: [1]

Oil prices rose for the sixth consecutive year in 2007, the first time this has happened since 1861, BP said Wednesday. Speaking at the presentation of the UK supermajor's latest global statistical review, Chief Executive Tony Hayward declared that, "The era of cheap energy is over, in the medium term at least."

BP highlighted the distorting effect of subsidies on demand and of "above-ground" constraints on supply. "Political factors, barriers to entry and high taxes all play a role here," Hayward said in written comments.

But the BP chief said he does not subscribe to the view that global production will never breach 100 million barrels per day. "I'm optimistic the world will figure out what needs to happen to allow production to rise. I'm certainly not a subscriber to [the] peak oil [theory]," Hayward said. French Total recently forecast global oil output will never top 95 million b/d (IOD Jun.4,p8).

"It will depend on the madness of men. It's not...