The surprise departure of BP's exploration boss has turned the spotlight on an oil search strategy that, after years of spending cuts, is focusing mainly on expanding existing fields rather than venturing expensively into the unknown.

That caution reflects a firm chastened by the $55 billion cost of its 2010 Gulf of Mexico (GoM) oil spill, and needing to squeeze every last drop out of a sharply reduced exploration budget at a time of low oil prices.

"Exploration doesn't necessarily have to look like [nature broadcaster] David Attenborough standing on a brand new frontier," a BP source told Reuters.

While BP's total reserves and fields coming onstream in the next four years look healthy compared with the other majors, its long-term project pipeline is the slimmest among its peers and its breakeven costs are the highest, according to some analysts, among them Macquarie.

Several BP sources said CEO Bob Dudley and his team were hammering out a new long-term strategy, with investors expecting an update on the company's post-2020 plans later this year or early next. The plan is likely to chime with a phrase that Dudley is fond of using: "big is not necessarily beautiful."

After asset sales forced on it by the Gulf disaster shrank the company by one-third, BP is today focusing its operations on five regions -- Angola, Azerbaijan, Egypt, the GoM and the North Sea.

It was in Angola, Egypt and the North Sea, already BP core regions, that Richard Herbert notched up his main successes during his two years as head of exploration.

Shrinking Budget

BP said Herbert's departure followed its decision to bring exploration and field development under one upstream team, headed since February by Bernard Looney.

But Herbert, who worked with Dudley in Russia in the 2000s, had also seen his annual budget shrink from $3.5 billion in 2013 to $1 billion this year--not enough to drill even a dozen complex deepwater wells, and certainly not enough to throw at a frontier exploration with potential high gain but also with a high risk of coming out empty-handed.

Royal Dutch Shell Plc (NYSE: RDS.A) sank $7 billion into an Alaskan exploration that it abandoned last year - something BP simply cannot afford. While BP's existing resources are not small compared to its peers' resources, analysts say the lack of a long-term project pipeline is a worry.

BP's reserves-to-production ratio, the number of years reserves can sustain current production, is the third-highest among oil majors at nearly 13 years, excluding output from Russia's Rosneft, in which BP has a stake of almost 20%. It trails only Exxon Mobil Corp's (NYSE: XOM) 17 years and Total's 13.5, but is a larger reserves-to-production ratio than than Shell's, Eni's or Chevron Corp.'s (NYSE: CVX).

By 2020, the startup of projects such as the West Nile Delta in Egypt and the Clair Ridge Field in the North Sea will have added 800,000 barrels of oil equivalent per day (boe/d) to BP's oil and gas output capacity, Dudley told Reuters last year.

In the short term, that appears to be comfortably enough to offset shrinking output from mature fields and maintain or increase a current output level of about 2 MM bbl/d.

But another indicator, the reserves replacement ratio (RRR)--new proven but unexploited discoveries as a proportion of annual production--reveals a less rosy picture.

Disappointments

BP's RRR fell last year to 61%, its lowest in many years, from 129% in 2013.

The RRR reflects not only a failure to unlock new deposits--a problem for all the multinationals--but also a reluctance to commit investment as oil prices languish about 60% below mid-2014 levels.

Among BP's rivals, Shell's RRR was negative last year, while that of Eni, fresh from discovering the giant Zohr Field offshore Egypt, was 148%.

Some of the seemingly promising projects that Herbert inherited from his predecessor, Mike Daly, have proved disappointing.

In Brazil, a corruption investigation has slowed projects for other majors as well as BP. Turmoil in Libya has forced it to write off some investments there, while low oil prices have hurt development of the Canadian oil sands.

Australian authorities have also refused so far to allow BP to explore the Great Australian Bight, an untapped basin off the southern coast, amid environmental protests.

BP has said it plans to make further acquisitions to build its resource base, such as the doubling of its stake in the North Sea Culzean Field, announced the week of May 23.

But Macquarie analyst Iain Reid said BP's pipeline of new projects, totalling 1.8 Bboe, was the lowest among the world's top five oil companies.

"BP has the lowest amount of pre-FID [final investment decision] resource, which leads to the weakest future growth rates," Reid said.

BP's project breakeven costs are also the highest in the group at about $72/bbl, according to Macquarie.

"BP's portfolio looks thin compared to peers, hence we continue to believe that it will need to acquire further resource to supplement the current project list and provide stronger growth at lower costs than its current portfolio."