LONDON - Last year's record oil prices did not indicate a shortage of supplies and will not be repeated, says the chief executive of British oil company BP.

John Browne said increased demand in China and heavy consumption around the world had caused insecurity.

But that had ended and surplus capacity was growing.

The high oil price was an unusual coincidence which would not be repeated. Oil prices had soared because demand grew at twice its normal rate.

Production outside the Opec oil producers' cartel was building.

"There is still a lot of oil around and there is still surplus capacity in Opec, which will build up over time," Browne said.

US crude oil prices peaked at record levels just above US$55 a barrel in late October, but have dropped as worries about winter supplies have eased.

Browne said the top 30 quoted oil companies increased their rate of investment by 15 per cent a year between 2000 and 2003.

People should not worry about oil reserves or stocks in Saudi Arabia.

"One will never know how much there is, but I find it too convenient to bring the point up when the price of oil is high," he said.

"Nothing has changed. There is plenty of oil not to be worried about it for the reasons people are worried at the present."

Browne said high oil prices had stopped his company from making acquisitions.

- REUTERS