BP is to cut 4,000 jobs in its global exploration and production business over the next two years, including 600 in the North Sea, representing about a fifth of its 3,000-member workforce there.
Blaming low oil prices, BP said the majority of the jobs would be lost this year, with the rest to go by the end of 2017.
The cutbacks form part of a major reduction in BP’s global “upstream” workforce – those who work in oil exploration and production – from 24,000 to less than 20,000 by December 2017. They come a day after oil and gas services firm Petrofac warned it would cut up to 160 jobs in the UK as part of business restructuring.
Oil prices have been hit by a combination of oversupply, weak global demand and the strong US dollar, and are close to levels seen in 2003. Brent crude, the global benchmark, is currently trading at $31.68 a barrel.
Morgan Stanley, one of Wall Street’s leading investment banks, predicts oil prices could tumble to $20 a barrel in coming months if China’s currency continues to decline against the dollar. Economists at Royal Bank of Scotland warned on Tuesday that oil could slump to $16 a barrel.
BP said it remained committed to the North Sea and would invest $2bn of capital into projects there this year as well as a further $2bn in its North Sea operations.
Mark Thomas, regional president for BP North Sea, said: “This will sustain many hundreds of jobs both in BP North Sea and our supply chain going forward. However, 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.”
This article was written by Julia Kollewe, for theguardian.com on Tuesday 12th January 2016 12.40 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010