BP's Hayward Chases Exxon With Refining Cost Cuts, Gas Output - BusinessWeek

March 3 (Bloomberg) -- BP Plc Chief Executive Officer Tony Hayward outlined plans to boost production and cut refinery costs as he tries to close the gap with Exxon Mobil Corp., the world’s most profitable oil and gas company.

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BP said yesterday it can increase production as much as 2 percent a year through 2015 as the share of natural gas in total output rises to 45 percent from 40 percent. It aims to improve underlying profitability in its refining business by $2 billion over two to three years, Hayward told investors and analysts during the company’s annual strategy briefing. “It’s not going to be easy, but their plan is credible,” said Jason Kenney, head of oil and gas research at ING Commercial Banking in Edinburgh. “They’ll be at least as good as Exxon in terms of return on capital employed over the next five or six years. That’s a major turnaround from the dark days of 2005 and 2006. They’re firing on all cylinders, but they’ve not yet pressed the accelerator.” BP’s oil and gas production passed Exxon’s for the first time last year even as the U.S. producer earned more than $4 billion above its London-based rival. Hayward said his company has larger, more complex refineries than its peers, allowing it to wring extra cash from its plants as fuel-processing profits for the industry remain depressed.

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