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London - BP sees a new future for itself as a "simpler" and "oilier" oil and gas company as it raises capital spending in the years to 2014.
In its first strategy update since striking a series of deals aimed at getting its Russian and US operations back on track, the No.4 ranked company among western investor-owned oil and gas groups told analysts it would raise capital spending, excluding acquisitions, to between $24bn and $27bn a year from an estimated $22bn in 2012 and $19.1bn in 2011.
This would be financed by higher cashflow from operations and asset sales of between $2bn and $3bn a year. The company reaffirmed a target it set at the start of the year to increase operating cash flow by 50 percent by 2014 versus 2011.
Like all top investor-owned western oil firms, BP is struggling to increase output and reserves in an era when nations guard their resource wealth jealously, and spending ever more billions of dollars to find new supplies and develop them.
Unlike its peers though, BP has had some difficult recent years in the United States and Russia - which contribute about half the company's output. As a result, BP has undergone a massive rearrangement of assets with total completed and planned divestments of $65bn - about half its total market value.
"We have sold 50% of our upstream installations, one third of our wells and half of our pipelines," Chief Executive Bob Dudley said, "yet we have only lost 9% of our production and 10% of our reserves. That makes us a simpler company."
Dudley also agreed the company was taking a route focused more on oil and less on gas than some of its rivals. "There are different strategies emerging," he said. BP is set to retreat in the rankings of Liquefied Natural Gas producers over the coming years, although in barrels of oil equivalent terms, its oil and gas output levels are about equal to each other.
In the United States, and particularly the Gulf of Mexico, BP became a pariah after its 2010 oil spill there. Although BP's US offshore operations are back to pre-spill levels, last month it pleaded guilty to criminal misconduct and added a $4.5bn penalty to the $23bn the disaster has cost it.
Investors expect the settlement will allow the company to move on, but last week the US government used BP's criminal status to ban it from new federal contracts over its "lack of business integrity."
Also last week, BP avoided bidding for Gulf of Mexico leases, raising a new question mark over its plans for a province where it is the main deepwater leaseholder, and which accounted for much of its output growth plans in past strategy announcements.
In Russia, where BP is more heavily invested than rivals, BP has had disagreements with its 50-50 partners in TNK-BP, privately-owned AAR. BP has also pursued new Russian projects with the increasingly dominant state sector in the form of deals with government-owned Rosneft.
In October and November, it finally struck a series of deals that allows it to exit TNK-BP, acquire a stake in Rosneft, and begin talks about such projects.
Rosneft board member Mikhail Kuzovlev gave a speech at Monday's presentation in which he hailed its $55bn dollar deals to buy out both BP and AAR as "one of the largest energy transactions in history."
Monday's strategy update comes hard on the heels of a November 23 reorganisation of BP's oil and gas production management, reversing a change it enacted after the spill.
The move puts Lamar McKay, currently head of BP's US operations, in charge of the upstream division, freeing up Chief Executive Bob Dudley from close oversight of the day-to-day operations he took over in the wake of the spill, which killed 11 men and spewed millions of barrels of crude into the sea.
McKay, like Dudley, is a former executive from Amoco, the company BP took over in 1997 to join the top tier of the industry.
