13 January 2016

British oil and gas company BP has made an announcement on its plan to reduce the headcounts by 5% in the face of tumbling oil prices.  BP confirmed that majority of the posts will be lost at the end of this year and the process would follow until the next year.

A company spokesperson said, “We want to simplify structure and reduce costs without compromising safety. Globally, we expect the headcount in upstream to be below 20,000 by the end of the year.”

He also informed that in North Sea, BP is planning to reduce headcount by 600 over the period of two years. It has currently around 3000 staff there.

Mail Online reported that the move is going to affect both staff and agency contractors. The report also stated that BP has a total global work force of 80,000. The reduction of headcount will be 5% of the total work force.

The oil company has suffered as the price of crude oil has dropped a staggering 70 per cent since 2014.

BP CEO Bob Dudley commented that it was expected that the price drop in crude oil would prevail until the first quarter of 2016 and beyond. “Prices are going to stay lower for longer. We have said it, and I think we are in this for a couple of years,” Dudley predicted.

The company’s website said that BP has invested around $38 billion in North Sea and it is going to invest $11 billion more before 2017.

David Elmes Professor of Practice for Global Energy Research Network said, “ BP’s announcement of job cuts is sad news for the staff and communities involved but are a reflection that world prices of oil and gas look set to be lower for longer.”

There are also reports of other oil companies doing the same last year.  Oil companies like Royal Dutch Shell and Chevron have already slashed thousands of posts globally to deal with the storm in oil price drop.

The whole scenario is nerve wracking for the staff and their family and would remain so until the next hike in oil prices, if ever there will be.

Extracted in full from Australia Network.