"Overall, at a segment level we are planning an upstream organisation with a workforce of below 20,000 people by the end of 2016," BP upstream chief executive Lamar McKay told staff today. "I cannot say how far below 20,000 since the environment continues to change and weaken."
In the UK North Sea upstream business segment, where the company employs about 3,000 people including contractors, BP will cut 600 jobs in 2016-17, with the majority of redundancies taking place this year. BP's upstream business in the UK will be down to 2,000 people including contractors at the end of 2017, as some positions could be eliminated naturally as certain projects are completed.
"In 2016, we are continuing to invest around $2bn of capital into North Sea projects and a further $2bn in running our North Sea operations," BP North Sea regional president Mark Thomas said.
BP so far has not provided any detail about planned job cuts in other regions.
McKay said that globally the company's upstream unit production costs have already been brought down by 20pc since BP outlined its "simplification and efficiency agenda" in 2014.
Oversupply in the market means "we expect prices will remain lower for even longer than we originally envisaged at the beginning of last year," McKay said. He also confirmed BP will "rephase and refocus activity where appropriate" to balance the books.
McKay said upstream executives will begin to share details of a longer-term plan for BP's upstream operations "during the first half of 2016".
BP said in October — when detailing its strategy for the next few years — that it was targeting 2017 operating and overhead costs to be $6bn lower than in 2014.
(Argus Media)
