By Peter Ker, SMH, 07 July 2015

Oil and gas giant BP has taken the knife to its Australian staff for the second time in less than 18 months, with a major round of redundancies in recent weeks.

BP declined to say how many jobs had been cut in the latest round, but confirmed that a recent strategy change for its downstream assets in Australia and New Zealand had prompted the cuts.

These changes will help to secure BP’s✓ position, particularly given the rapidly changing downstream landscape in Australia and the challenging external environment.

BP spokesperson

The company announced in May that its local terminals and depots would be run under joint ventures where BP would retain ownership but hand over daily control to third parties.

That deal will see UGL operate and maintain BP’s terminal network in Australia, while Toll, Lowes Petroleum and Great Southern Fuel supplies will take control of BP’s depots and fuel distribution business.

A BP spokesperson said those changes were being implemented during the second half of 2015 and were the cause of the recent job cuts.

“As a result of these changes, a number of support positions based at our Melbourne office will no longer be required. Employees impacted by these changes have been kept informed and supported throughout the ongoing process,” the spokesperson said.

“These changes will help to secure BP’s position, particularly given the rapidly changing downstream landscape in Australia and the challenging external environment.”

Fairfax Media believes the number of jobs cut exceeds 50, and will be higher once the handover to the new joint venture partners is complete.

The cuts come barely 16 months after BP “disestablished” about 300 jobs at its Australian headquarters in Melbourne, and asked workers to reapply for their jobs through a process that required them to send in a photo of themselves along with a five-year plan for their personal career development.

Benchmark oil prices have virtually halved since those jobs were “disestablished” in 2014, and brent crude prices have slumped again this week to a three-month low below $US60 ($80) per barrel.

The oil price slump is taking a toll on BP’s multiple Australian holding companies, most of which saw their profits fall by between 40 and 75 per cent during the 2014 calendar year.

The company said in financial documents lodged with the Australian Securities and Investments Commission that it expects oil prices to “remain low in the near term”.

“Input cost deflation is expected to lag the oil price decrease, resulting in continuing pressure on margins,” the company said.

BP said in the same documents that its staff numbers in Australia had fallen from 7213 to 6624 between 2013 and December 31, 2014.

BP has a stake in the North West Shelf project and is a minority partner in the Browse LNG project that Woodside and Shell are driving.

The company is also exploring for oil in the Great Australian Bight with Norwegian giant Statoil.

Extracted in full from the Sydney Morning Herald.