Oil industry conditions 'worst for a decade '

BP chief executive Lord Browne says industry conditions in the first quarter of 2002 were the worst for a decade.

He says aviation fuel was stockpiled in huge amounts due to the slowdown in air travel following the September 11 terror attacks.

Lord Browne says refining and marketing margins are starting to recover, particularly in the US.

But he says the uncertainty that dominated 2001 continues, and it's "still too soon to be sure it's back to business as usual".

Lord Browne told BP's annual meeting that oil production was growing at a rate of 5.5% per annum.

He reiterated guidance given in the full-year results that 2002 investment would range from £8.3 billion to £8.99bn (€14.6bn), in line with last year.

Lord Brown told shareholders: "No one could rely on prices and so, to expand returns, the only option was to focus on productivity.

"2001 was also a year of transition for us. The end of the period of mega-mergers and the start of a period of organic growth."

He added: "Our strategy remains unchanged. The range of products we produce is reflecting the changing pattern of demand.

"We're creating a sustainable company with markets and resources which have the potential to deliver continued growth for many years to come, and which keep the balance of the business broadly constant."