BP (NYSE: BP) cannot solve the world’s oil price increase troubles on its own, but it aims to assemble a big contribution. Its Prudhoe Bay property is getting old which means it will start to yield less crude, but the company has decided to drill more wells besides.

“No field the size of Prudhoe Bay has ever been shut in,” said Gordon Pospisil, a senior BP petroleum engineer who is main the effort to tap the field’s heavy oil reservoirs” according to Reuters. The company believes that the region may have as much as two billion barrels in crude left.

The effort says a great deal about the current state of the oil industry. It plus point to a potential drop in oil company

profits. New technology allows wells to produce more oil by drilling deeper and using chemicals to bring up more crude. But, all of that costs money. That may squeeze margins.

The fact of the matter is that, with oil at shut to $100, there is a growing concern that demand will greatly outpace supply by the next decade as countries like China use more oil OPEC may not increase production considering it wants to keep the revenue flowing to it members at record levels.

That leave companies like BP to produce up the difference.

Douglas A. McIntyre is an editor at 247wallst.com

Original post by Douglas McIntyre

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