BP's ex-CEO sees solid reasons for high oil prices

By Simon Webb

ABU DHABI (Reuters) - High oil prices are well supported by a number of factors including tight global inventories, leaving little reason to expect prices to ease much, the former chief executive of BP said on Monday.

"I wouldn't try to predict the price but there are solid reasons for high oil prices - inventories are very thin," John Browne, who stepped down from the helm at oil major BP in May 2007, told Reuters on the sidelines of a green energy conference in the United Arab Emirates.

At the same conference, U.S. Energy Secretary Sam Bodman pointed to low oil inventories as he repeated a plea for OPEC oil producers to boost output.

"I was surprised by the level of the price when it rose to $100, but not by the fact that it was going up," Browne said.

Strong demand and a dramatic increase in production costs were among factors supporting oil's rise, Browne said earlier in a presentation to the conference.

Oil CLc1 traded at around $89 a barrel on Monday, after hitting a record of over $100.09 earlier this month. The price has more than quadrupled from below $20 at the start of 2002.

The energy industry is facing the biggest changes that Browne had seen during his 40-year career as it looks to address high energy costs, growing energy insecurity, increasing concern about the environment and technological innovation, he told the conference.

Increased efficiency would play a central role in the future of energy, said Browne, who joined private equity firm Riverstone Holdings as managing director in August.