UK oil giant BP plans to cut approximately 4000 jobs across its global upstream sector in the next two years to simplify its business, improve efficiency, and reduce costs.
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Image from BP. |
BP made the initial announcement this morning (12 January) at a town hall meeting in its Aberdeen office that has echoed across the world as the message was delivered to its global upstream team of 24,000 people.
“Overall, at a segment level we are planning an upstream organization with a workforce of below 20,000 people by the end of 2017,” Brett Clanton, BP Houston senior director of media affairs, upstream told OE. “To reach this level we will need to reduce our current workforce of BP employees and agency contractors by at least 4000 additional people.”
Job cut numbers for BP’s US upstream business, which includes the Gulf of Mexico, Alaska, and Lower 48 onshore, were not immediately available.
However, for BP’s North Sea sector that includes more than 20 fields, four pipeline systems and three onshore oil and gas terminals, expects to see a reduction of about 600 staff and agency contractor roles by the end of 2017, with the majority of the job cuts taking place this year.
“Given the well-documented challenges of operating in this maturing region and in toughening market conditions, we need to take specific steps to ensure our business remains competitive and robust,” Mark Thomas, BP North Sea regional president said in a statement.
“This is very disappointing news and a sign of the continued difficulties facing the sector, but we welcome the commitment from BP that the company still sees a long-term future in this area and is continuing to invest heavily in the North Sea,” Aberdeen city council leader Councillor Jenny Laing said on Twitter following the announcement of BP’s job cuts.
BP’s North Sea business employees about 3000 people, and there are several major ongoing projects in the region.
“We are committed to the North Sea and see a long term future for our business here,” Thomas said. “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. This will sustain many hundreds of supply chain contractor jobs going forward.”
Major projects in the North Sea include the multi-billion dollar Clair Ridge project, which is in the second phase of development west of the Shetland Islands. The project will install two new bridge-linked platforms to access an estimated 640 MMbbl of oil and gas, is planned to come on stream in 2017 and will extend production from Clair to 2050.
BP and its partners also confirmed plans in 2011 to progress a multi-billion dollar redevelopment of the Schiehallion and Loyal fields, west of Shetland, which will take production to 2035 and possibly beyond.
The new FPSO for the field, the Glen Lyon, is due to sail to the UK this year, replacing the former Schiehallion FPSO.
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