BP plc is whittling its global upstream workforce of about 18,000 by nearly 3%, mostly through “natural attrition,” as the supermajor simplifies the organization.
No specific numbers or specific regions were provided for the job cuts, estimated at more than 500.
BP management “informed staff of planned organizational changes in its upstream business regions worldwide, aimed at further improving the efficiency and competitiveness of its organization,” spokeswoman Rita Brown told NGI.
“This is part of the ongoing process across BP to modernize its business to adopt more efficient ways of working and also to further simplify its organization and increase efficiency following $50 billion worth of divestments over recent years.”
The London-based oil and gas giant is focused on spending capital efficiently, she said, “to maintain its competitiveness in a rapidly changing world, without compromising safety, which remains BP’s No. 1 priority.”
The commitment to a five-year growth strategy remains, Brown added.
At the annual general meeting held earlier this week in London, Group CEO Bob Dudley noted that 2017 was one of BP’s “busiest ever,” with seven major projects started on time and under budget. “That contributed to an increase in our upstream production last quarter of 14% year-on-year.”
BP reported its strongest underlying profit in three years during 1Q2018, with earnings up 71% year/year and 23% sequentially.
The company is “adding value not just volume,” Dudley said. “Margins on our major projects out to 2021 average more than one-third higher compared with 2015’s base production.”
BP’s upstream, downstream and alternative energy businesses are “firing on all cylinders. We’re back to growth and pursuing new opportunities” following the 2014-2016 oil market downturn and the massive revamp following the 2010 Macondo well blowout in the Gulf of Mexico.
“We are already five quarters into the five-year plan we rolled out last year, and we have been moving with real pace,” Dudley said. “Next month we’ll be announcing first gas flowing to Turkey from our massive Shah Deniz project in the Caspian, flowing through new pipelines that we’re building to take gas onto Europe.”
Shah Deniz would be the second start-up this year, following the Atoll project in Egypt during March, “and we’ve got four more on the way by the end of the year.”
Dudley also touted the progress by the upstream team, which is led by Bernard Looney.
He noted that usually, when production begins from a reservoir, “you expect the amount of oil or gas you can pump to go down over time. It’s one of the reasons why we need to keep on exploring and finding new resources.
“It makes sense that reservoirs run down...and it typically means production falls by around 3-5% each year.”
However, during 2017, “Bernard’s team turned that natural law of the industry on its head. Our base production didn’t go down at all in 2017 and was actually up by 0.7% at the end of year.”