BP Says Oil Majors Could Merge With State Oil Cos

The last time oil prices crashed, in the late 1990s, it sparked a round of mergers between the big international oil companies.

BP Chief Executive Tony Hayward said western oil majors could merge with state-owned oil companies but dismissed mergers between the majors themselves.

The last time oil prices crashed, in the late 1990s, it sparked a round of mergers between the big international oil companies (IOCs), with Exxon buying Mobil and BP buying Amoco.

But Hayward said the challenge in the industry remained to gain access to resources and that combining two large western oil majors did not boost underlying reserves bases.

"I'm not certain that the industrial logic is terribly compelling," he told a conference call with reporters.

"It may be more sensible to think about combining IOCs, with technology and capability, with NOCs (National oil companies) with resources," he added.

Most of the world's oil reserves are controlled by state oil companies in countries such as Kuwait, Mexico, Russia and Nigeria. The western majors try and secure contracts with NOCs by offering to share their proprietary technology and project management capabilities.