BP (NYSE:BP) is to raise capital spending on its crucial upstream division, the company announced in an investor presentation. From 2014 through to 2020, BP is to spend $24 billion to $27 billion annually on exploration and production activities, a significant increase from previous levels. In 2011, the company's expenditures in upstream activities totaled around $19.1 billion.

BP said it is able to fund the higher expenditures through proceeds from the divestment of assets, such as the sale of the company's 50% equity stake in the TNK-BP joint venture to Rosneft, and increased operating cash flow from sources such as recent upstream projects. BP expects that the proportion of its total capital expenditures for upstream activities will rise from the current level of around 70% to approximately 80%.

The move comes just after the Environmental Protection Agency suspended the company from conducting new business with the government. It also follows the company's agreement with the government last month to accept criminal responsibility for the 2010 Deepwater Horizon disaster in the Gulf of Mexico, which will see it pay several billion dollars in penalties.

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