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Peter Sutherland, Chairman of UK oil major BP, has rejected the recent prediction made by Alexei Miller, Chairman of Russia's Gazprom, that the price of crude oil is set to reach $250 a barrel.

Speaking at the European Policy Centre in Brussels, Mr Sutherland said there was no problem with oil supplies in the medium term and dismissed Mr Miller's forecast that the price of oil is set to almost double from current levels of $135 per barrel.

The BP chairman said “Personally, I don’t believe in some of the more apocalyptic predictions. I don’t believe we’re in for a spike to $250 as suggested in price per barrel.”

Mr Sutherland attributed the recent surge in the price of oil to growing demand, a lack of investment in oil exploration and geopolitical uncertainty in areas such as Iraq, Venezuela and Nigeria. He called for new investment in the development of existing oil fields in order to help offset demand and remained positive about the future.

“I’m hopeful that we won’t have dramatic further escalations in the price per barrel,” BP's Chairman said.

In his call for investment in existing oil fields, BP's Chairman appeared to be at least partly referring to the current sitation in Russia where there are a number of ageing oil fields and oil production has also been decreasing. Output in April fell to 9.72 million barrels of oil per day, the lowest level in 18 months. The country's oil production may decline this year for the first time in ten years as refiners are faced with high costs, ageing oil fields and new deposits in increasingly remote areas.

BP's global oil production dropped by 130,000 barrels per day last year, whilst output in OECD countries also fell in 2007 for the fifth consecutive year. This decline would seem to highlight the fact that the resources of private investment companies like BP are limited.