* BP 'do not apologise' over stake in Russia's Rosneft
* Dudley says company 'not at point' of boosting dividendsyet
* BP could bid for BHP's shale assets, CEO says
* BP to take slow approach in expanding renewables business
* Dudley says 'optimistic' about climate change efforts
By Ron Bousso and Dmitry Zhdannikov
LONDON, May 21 (Reuters) - After the near collapse of hiscompany following the 2010 Gulf of Mexico disaster and athree-year slump in oil prices, BP Chief Executive Officer BobDudley is hardly relaxed.
"It doesn't feel like we are in a serene time for any energycompany," Dudley told Reuters in an interview.
BP is stronger today than at any other time since the 2010Deepwater Horizon rig accident.
With oil prices at their highest since late 2014 and BPshares back to levels not seen in more than 8 years, it is onceagain in a position to contemplate boosting dividends andacquiring, Dudley said.
Sitting in his office in BP's central London headquarters inSt James Square, Dudley, 62, said he intends to carry on leadingthe company into 2020 and navigate it through a phase ofexpansion and new uncertainty following a tumultuous eight yearsat the helm.
The oil and gas sector is looking to retain its relevance aseconomies battle climate change by weaning themselves from theirdependence on fossil fuels, a major source of greenhouse gasemissions.
For BP, it is a two-speed race.
The 110-year old company is undergoing its fastest growth inrecent history with new oil and gas fields from Egypt and Omanto the U.S. Gulf of Mexico, riding a tide of higher oil pricesfollowing the 2014 downturn.
It is gradually paying off more than $65 billion inpenalties and clean-up costs for the Deepwater Horizon accidentwhich left 10 employees dead.
Regarding the danger of the company going bankrupt at thetime, Dudley said: "The worst moment was when I heard that ourdebt was untradable back in the summer of 2010... To me that wasa moment of the unthinkable was possible."
Dudley says he no longer sees BP as an acquisition targetafter facing years of speculation it could be bought out.
The company is focused on increasing production and cashflow while reducing its large debt pile, after which it willconsider boosting shareholder returns such as dividends although"we're not at that point yet", Dudley said.
Longer-term challenges also loom.
Investors are increasingly pressing energy companies to findways to adapt to the energy transition, and Dudley is looking tostrike a balance between reducing a large carbon footprint whilesecuring revenue.
"This is the great dual challenge that the industry and BPfaces: how to supply the world's energy on multiple fronts ofgrowing population and doing it with less emissions," saidDudley, who was appointed to the helm of BP months after theApril 2010 spill.
BP, like rivals such as Royal Dutch Shell, isbetting on natural gas, the least polluting hydrocarbon, tosustain an expected surge in demand for electricity as economiesgrow and transportation is electrified.
Gas is also playing a key role as a back-up to renewableenergy such as wind and solar in power generation.
To that end, BP is expanding its gas production through newprojects in Oman, Egypt and Trinidad and Tobago.
Gas already accounts for over 55 percent of its production.
"I am optimistic about the climate change if you can combinerenewables wind and solar and natural gas. To me that's part ofthe big answer," Dudley said in an interview with Reuters.
In the early 2000s BP introduced the slogan "BeyondPetroleum" and adopted a sunburst logo after launching an $8billion expansion into renewables. The company was forced towrite off its solar business 10 years later, but still retains alarge U.S. onshore wind business and biofuels plants.
Now, Dudley is taking a cautious approach, investing insmaller start-up companies in renewables, clean fuels andbattery charging docks.
"We have to go slow and pick the right low carbon fuels," hesaid. BP "will be a broad-based company that supplies all formsof energy that are needed that can be done economically."
The company will invest $500 million per year in low-carbonenergy and technology in the coming years out of a totalspending of $15 to $17 billion, a range which Dudley said thecompany could stay within.
"If a shareholder or someone else came to BP tomorrow andsaid here is $10 billion to invest in low carbon energies forus, we would not know how to do that yet."
BP is also expanding its vast global network of petrolstations and investing in convenience stores and charging spots,hoping to retain its dominant brand as electric vehicles becomemore popular.
"I'm not worried about BP in this area. The most strategicthing we can do is to get our balance sheet strong so that whenwe have the firepower we can do anything in these areas."
LESSONS
BP expects demand for oil to peak in the late 2030s, afterwhich it will plateau and gradually decline.
For BP, whose roots go back to 1908 with the discovery ofIran's first oil field, the days of the black gold are far fromdead.
While oil prices in recent weeks have hit their highestlevels since late 2014 at $80 a barrel, BP are working on anassumption that prices will remain at a range of $50-$65 perbarrel due to surging U.S. shale output and OPEC's ability tocrank up output.
Mega projects involving complex, multi-billion facilitiessuch as huge offshore platforms that came to symbolise thetechnological prowess of the world's top oil companies are mostlikely a thing of the past, Dudley said.
Instead, BP is opting for phased developments that requireless capital and less time to construct, which make them easierto control at a time of uncertainty over oil prices.
"Many of the companies in the industry are remembering thelesson learnt during the $100 oil era (which) is take it inphases," Dudley said.
BP is applying this approach in many of its main productionhubs such as Egypt and Gulf of Mexico, where it can continueraising production into the early 2020s, Dudley said.
BP's oil and gas output is set to reach around 4 million bpdby the end of the decade, a level last seen in 2009, with morethan a fifth of that coming from projects started since 2016.
It is partnering with top oil producing nations which havesome of the lowest costs of extraction such as Oman, Azerbaijanand most importantly Russia, where BP has a 19.75 percent stakein Rosneft and where it draws one third of itsproduction.
BP has a relatively small shale business, focused mostly ongas, but Dudley is considering growing in the sector, which hasattracted billions of dollars in investments in recent years.
"(Shale) comes down to economics and competitiveness on whatis on offer. So far they feel overheated... it is not a burningneed to fill that in the portfolio, but if it is attractive, wewill."
BP could place a bid for BHP Billiton's shaleassets, Dudley said.
RUSSIA
BP's position in Russia has put the firm in the spotlight asthe United States and Europe tighten sanctions on Moscow.
Dudley, who sits on the board of Rosneft, believes BP cancontinue there and act as a bridge between countries.
"We don't apologise for doing business in Russia," saidDudley. "Certainly today within the boundaries of the sanctionswe can and do operate without issues."
BP will continue to operate in Russia and expand projectswith Rosneft even though the company has had to turn downcertain offers to develop projects offshore or in the Arctic, hesaid.
Dudley also said BP remained committed to its stake inRosneft, which it received following the 2013 sale of TNK-BP.
(Reporting by Ron Bousso and Dmitry Zhdannikov)
