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BP to boost US investment after tax reform

06 Feb 2018 13:19 GMT
BP to boost US investment after tax reform

London, 6 February (Argus) — BP will "no doubt" increase its investments in the US thanks to president Donald Trump's tax reform, according to chief executive Bob Dudley.

"[The tax reform] is important for BP, because over the last decade we have been America's largest energy investor — $90bn of capital over the last decade. That is separate and aside from the $65bn of obligations with Macondo [oil spill in US Gulf in 2010]," Dudley told investors today.

"So, if you take what was one of the highest tax rates in OECD at 35pc and take it down to 21pc, this is, of course, of enormous value to business in many ways… despite these short-term charges that everyone has been trying to sort out. So, it is important for us. There is no doubt we will increase investments," Dudley said.

BP took a $859mn one-off charge in the fourth quarter of 2017 as a result of the US tax changes, stemming from a revaluation of deferred tax assets and liabilities.

"The regulatory system in the US is suddenly so much easier," he said about the recent changes in the US. "From a business community standpoint, it is quite transformational. There will be a lot of capital attracted to the US because of it, in my opinion."

Dudley's comments echo those of ExxonMobil and Shell made last week.

Shell chief financial officer Jessica Uhl said "the tax change will have a material impact in terms of the cash that we will be able to generate, and should encourage further investment". And ExxonMobil chief executive Darren Woods pledged to spend more than $50bn in the US over the next five years, compared with around $47bn in 2013-17.