Published: Tuesday, 20 Oct 2009 | 11:29 AM ET
By: Patrick Allen
CNBC Senior News Editor
The CEO of oil giant BP believes the drop in the dollar in recent months is a major factor behind oil prices breaking through $75 a barrel.
Speaking at an industry conference in London, Tony Hayward, the boss of the £100 billion ($164 billion) company [BP-LN 569.00 -5.20 (-0.91%)] said he believes that fundamentals are also playing a part in the rise, but will not change his investment plans.
- Watch the full interview with Tony Hayward above.
Having refused to axe investment drastically when prices retreated from record highs, Hayward says he is not going to start spending more now that prices are recovering.
Investors should not fight the trend higher given all the cheap money being pumped into the system by the Federal Reserve and other central banks, Jonathan Kornafel, a director from Hudson Capital Energy, told CNBC's Capital Connection Tuesday.
Kornafel though is worried things could turn around given the huge amount of spare capacity in the in the system, which means demand from refiners could begin to slacken.
Canada's oil sands are one area where BP is looking to expand, as rivals Exxon [XOM 73.00 -0.62 (-0.84%) ], Chevron [CVX 77.02 -0.64 (-0.82%) ] and Shell [RDSA-LN 1894.50 -8.50 (-0.45%)] have bet big on extracting crude from there. The extraction process is very energy-intensive and has been criticized by the green lobby.
BP, which has dipped its toe into this market, could now expand its presence and believes governments need to support the oil industry's attempts to meet rising global demand for crude by creating a stable investment environment to allow them to spend on developing new fields across the world.
Hayward told CNBC he believes that the December meeting of world leaders in Copenhagen is just the beginning of the road towards a sustainable global energy policy.
"I think it's clear that the scale of the energy challenge the world faces, which is to provide energy for economic growth and to leave us with a sustainable planet, is such a scale that the government needs to set the framework...then the industry would invest," Hayward said.
- CNBC anchor Steve Sedgwick contributed to this report
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