OREANDA-NEWS. February 08, 2017. BP has not ruled out expanding its US shale business through acquisitions, but is in no hurry to make any deals.

"We will keep our eye open and see if there are things to add to it. But we are not in a hunt to make big acquisitions. They still look a little expensive to me," chief executive Bob Dudley said today.

BP has been running its onshore operations in the US lower 48 states as a standalone business for two years, in an attempt to speed up decision-making, cut costs, ensure better investment decisions and reduce the time it takes to bring resources on stream. There are signs the strategy is starting to pay off. BP's lower-48 production rose to 302,000 b/d of oil equivalent (boe/d) last year, from 284,000 boe/d in 2015, of which 84pc was natural gas. BP's production costs in the lower 48 declined to \\$7.44/boe from \\$8.73/boe in 2015, while capital expenditure fell to \\$812mn from \\$1.04bn.

Some of BP's peers — notably ExxonMobil and Chevron — have flagged up their US shale businesses as key growth areas over the next few years, led by their liquids-rich acreage in the prolific Permian basin. ExxonMobil recently agreed a deal worth up to \\$6.6bn for a package of US shale assets, including 250,000 acres in the Permian.

But BP is in no rush to emulate ExxonMobil's shale expansion.

"The lower 48 is a huge market with many small players. Some of the big companies have come in but nobody is dominant there. It is such a huge market that I would not rule out… that we would do something. But it is not a high priority focus that we need to go and do something in the lower 48," Dudley said. "We are not on the prowl".