Wednesday 24 January 2018

BP to slash thousands more jobs in face of oil downturn

Photo: Getty Images
Photo: Getty Images

British oil and gas company announced plans on Tuesday to slash 5pc of its global workforce in the face of a continued slump in oil prices.

It said it aims to reduce its global oil production, or upstream, headcount by 4,000 to 20,000 as it undergoes a $3.5bn (£2.42bn) restructuring programme. BP said its headcount totalled around 80,000 at the end of 2015.

With crude oil prices at 12-year lows of around $32 a barrel, the world's biggest oil and gas producers are set to continue aggressively slashing spending this year as they face their longest period of investment cuts in decades.

"We want to simplify (our) structure and reduce costs without compromising safety. Globally, we expect the headcount in upstream to be below 20,000 by the end of the year," a company spokesman said.

In the North Sea, he said BP planned to reduce headcount by 600 people over the next two years with most cuts likely in 2016.

BP shares, which have fallen by around 40pc since the oil price began to slide in mid-2014, were up 1.2pc at 11:57 GMT compared with a 0.8pc rise for the broader sector index .SXEP.

Oil companies including Royal Dutch Shell RDsa.L and Chevron have already slashed tens of thousands jobs globally to deal with a near 75pc drop in oil prices since June 2014 that has seen earnings collapse.

BP, which must also pay $20bn in fines to resolve the deadly 2010 Gulf of Mexico spill, announced in October plans for a third round of spending cuts and said it would limit capital spending, or capex, to $17-19bn a year through to 2017.

The company, which has already sold over $50bn of assets in recent years in order to cover the spill costs, said it expected an additional $3-5bn of divestments in 2016.

Fourth-quarter upstream earnings for oil majors are expected to fall by 84pc from a year earlier and 48pc from the previous quarter, according to analysts at Macquarie.

BP will report fourth quarter and full-year results for 2015 on February 2.

Reuters

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