BP boss Bob Dudley is not yet ready to boost spending despite the rebound in oil prices.

The company will keep capital expenditure below $17 billion this year and next, CEO Dudley said in a Bloomberg television interview in Davos, Switzerland. That’s $6 billion lower than 2014, when crude prices first started to slump, showing that the impact of the two-year industry downturn still lingers.

“I think we are climbing very, very slowly out of a very tough period for the industry,” Dudley said Tuesday. “Our focus now is to get our own engine moving again” while staying disciplined and being ready for more volatility, he said.

While the London-based company is keeping a tight grip on spending and new projects, it is also seeking to grow again. It has finally settled billions of dollars of payments related to the 2010 Gulf of Mexico spill, which shrank the company by a third, Dudley said. BP has agreed to spend more than $4 billion on assets since the end of last year.

The oil industry has become more optimistic since the agreement last month between the Organization of Petroleum Exporting Countries and 11 other producers to cut output with the aim of ending three years of oversupply. BP will be able to cover spending and dividends from its income at an average crude price of $55/bbl this year, Dudley said, potentially bringing an end to two years of negative cash flow and rising debts.

Brent crude, the global benchmark, traded at $56.52 in London as of 10:43 a.m. Prices will average $55.88 this year, according to the median of 46 analyst estimates compiled by Bloomberg.

BP approved a $9-billion project to develop a deepwater field in the U.S. Gulf of Mexico and another to expand a liquefied natural gas export project in Indonesia last year. A $2.2-billion expansion of output in Abu Dhabi and a $916 million investment in fields in Mauritania and Senegal last month were followed by a A$1.785-billion acquisition of Woolworths Ltd.’s network of Australian gas stations.

The company will continue to be “very selective on projects this year,” Dudley said. BP plans six major developments in 2017, he said.

Source: http://www.worldoil.com