BP Announces 4,000 Job Cuts

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Oil and gas major BP plc (NYSE:BP) (London, England) has announced plans to slash around 4,000 jobs from its global exploration and production unit, including 600 from its North Sea operations.

The company blamed plummeting oil prices for the cuts, which will see a fifth of its 3,000 North Sea staff lose their jobs. The cuts will affect oil rig workers, agency staff and office-based staff, but the company said that it has no plans to shut any of its U.K. rigs. Globally, BP's exploration and production business employs around 24,000 people, a number it wants to reduce to below 20,000 by 2017. The remainder of the cuts will affect staff in Azerbaijan, Angola and the U.S..

Mark Thomas, regional president for BP North Sea, told media: "In toughening market conditions and given the well-documented challenges of operating in this maturing region, we need to take specific steps to ensure our business remains competitive and robust. An inevitable outcome of this will be an impact on headcount, and we expect a reduction of around 600 staff and agency contractor roles by the end of 2017, with the majority of these taking place this year. We are speaking to our staff and agency contractor management and will work with those affected over the coming months."

He added: "We are committed to the North Sea and see a long-term future for our business here. For example, in 2016, we are continuing to invest around $2 billion of capital into North Sea projects and a further $2 billion in running our North Sea operations."

Scotland's first minister, Nicola Sturgeon, said: "This is a very difficult time indeed for people working in the North Sea."

The price of Brent crude, the global benchmark, has dropped to around $31 a barrel from $100 a barrel in mid-2014. The price crash has been impacted by a number of factors, most notably a demand slump caused by China's economic slowdown, strong U.S. shale gas production and a refusal by the Organization of the Petroleum Exporting Countries (OPEC), to reduce output.

Industrial Info has been tracking the growing trend over the past year of major oil and gas companies radically altering their investment plans and making job cuts. In recent months, ConocoPhillips Company (NYSE:COP) (Houston, Texas), Chevron Corporation (NYSE:CVX) (San Ramon, California) and Encana (NYSE:ECA) (Calgary, Alberta) have all cut their capital expenditure plans for 2016. For additional information, see December 15, 2015, article - More North American Oil & Gas Producers Announce Reduced Capex for 2016.

Industrial Info is tracking 179 active Chevron projects worth $126.47 billion, including $6.24 billion for projects that are scheduled to kick off this year, alongside 87 ConocoPhillips projects worth $76.63 billion, which includes $7.42 billion in projects starting in 2016.

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