BP, THE world’s second- biggest oil company, has effectively ruled itself out of driving a new round of industry consolidation by claiming that it was not dependent on acquisitions to achieve growth targets.

Lord Browne of Madingley, the chief executive, also dismissed market speculation linking it to Repsol YPF, the Spanish rival, as he revealed that BP could distribute up to £37 billion to shareholders over the next three years.

Repsol’s shares rose strongly on Monday after the expiry of a “golden share” arrangement, designed to give the Spanish government control over the oil company, triggered takeover speculation. BP and ENI, of Italy, were mooted as likely suitors.

Yesterday Lord Browne denied BP’s interest and pointed to his company’s huge organic growth profile, which includes participation in half of all new major oil and gas projects not undertaken by members of Opec, the oil cartel.

BP’s growth pipeline includes 20 big projects that are expected to come on stream over the next three years and should underpin ambitions to increase production by 4 per cent a year until 2010. BP’s average production last year was just over four million barrels of oil and gas- equivalent per day (bpd), slightly lower than original targets because of damage caused by hurricanes in the Gulf of Mexico. This year’s target is 4.1 million to 4.2 million bpd. BP’s expenditure for this year will be $15 billion (£8.6 billion), compared with $14 billion last year, when it reinvested 65 per cent of its operating cashflow. The industry average is 54 per cent.

Lord Browne said: “In terms of growth we don’t need to acquire anyone. We don’t even need new acreage. Right now we see nothing, given the rather strong prices being put on things, that attracts us. The same is true of refining [assets].”

BP had more than 18 billion barrels of proven reserves at December 31 and Lord Browne said that he expected to convert 11 billion barrels of its 41 billion barrels of non-proven resources into proven reserves by 2010. BP’s reserves replacement ratio for last year was 100 per cent on a UK reporting basis but only 95 per cent under more stringent US rules that take into account year-end prices.

Lord Browne was speaking after BP had reported a company record of $22.3 billion (£12.7 billion) net profit for the year to December 31. The result was below analysts’ expectations and prompted a 2.7 per cent slide in BP shares to 647½p. BP reports its profits quarterly and analysts had been expecting a fourth-quarter adjusted profit of $5.6 billion. Instead, BP’s quarterly profit was $4.9 billion.

Analysts at Merrill Lynch, one of BP’s three house brokers, described the fourth-quarter performance as disappointing, “partly offset by a more robust performance on reserve replacement, operational outlook and shareholder distribution”.

Jonathan Copus, analyst at Investec Securities, said: “Although these are undoubtedly a disappointing set of results, we continue to believe the group’s de-rating against the market offers a value opportunity relative to the crude-leveraged E&P stocks.”

BP’s 2005 profit included substantial write-offs relating to the Texas City refinery explosion last March, which killed 15 people, and the near-sinking of the Thunder Horse platform in the Gulf of Mexico.

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