BP to brief staff about job cuts

Published: Thursday 15th January 2015 by The News Editor

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Oil giant BP is expected to brief staff in its North Sea operations about plans for job cuts.

The company announced restructuring plans last month following a fall in oil prices.

Some 15,000 of BP’s employees are based in the UK, while the company employs about 84,000 people worldwide.

It warned last month that the rate of job losses across the UK and abroad will increase, with the focus likely to be on head office and back office roles rather than front-line operations.

Today’s briefing is to be held at BP’s North Sea headquarters in Aberdeen, the BBC reported.

The oil giant has warned that plans to streamline its business will cost it one billion US dollars (£638 million) over the next year.

The restructuring bill will reflect the need to downsize its operations following 43 billion US dollars (£27.5 billion) worth of divestments since the Gulf of Mexico disaster in 2010.

The move to simplify the business comes with the price of oil at around 65 US dollars a barrel, some 40% below its level earlier last year.

Yesterday Bank of England governor Mark Carney said the plunge in oil prices represents a ”negative shock” to the Scottish economy.

Mr Carney maintained that the decline – which has fed through to ultra-low inflation which it is hoped will boost consumer spending – was an overall positive development for the UK.

But he admitted that Scotland, which is heavily reliant on North Sea reserves, would face a hit from the fall, which has seen the price of a barrel of Brent crude tumble by more than half since last summer to as low as 50 US dollars, a near six-year low.

His comments came as Scotland’s First Minister Nicola Sturgeon said the falling price of oil does pose a risk to jobs in the North Sea and announced that a task force was being set up to help the sector.

Energy Secretary Ed Davey – who is meeting with the industry in Aberdeen – said there must be no “panicked” response to short-term price fluctuations.

“There are a huge number of jobs, not just in Aberdeen and the north east of Scotland but across Scotland and the whole of the UK, that are dependent on the oil and gas industry so the Government is determined to do everything we can to work with industry to make sure we can retain those jobs,” he told BBC Radio 4’s Today.

“Of course there are problems for a number of oil and gas companies as a result of the lower oil price but we also have to think strategically because energy is a long-term gain.

“I am talking about energy security for the UK in the 2030s and the 2040s. Even as we green our economy and reduce our dependence on oil and gas and have electric vehicles and so on, we are still going to be using an awful lot of oil and gas in the decades to come.

“Therefore we have got to know where our oil and gas supplies are coming from. We have got to make sure we have a long-term view and are not just panicked by short-term changes in the oil price but we are strategic.”

Published: Thursday 15th January 2015 by The News Editor

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