British Petroleum Co. plc has started a new round of cost cutting measures.
The measures include spending cuts and staff reductions to combat declines in crude oil prices and economic recessions in Europe and the U.S.
Capital spending plans for 1992 have been trimmed to $6.5 billion from $7 billion. BP's three main businesses-BP Exploration, BP Oil, and BP Chemicals-have been asked to cut operations costs by the end of the year.
The moves are designed to combat short term price and economic problems. BP's overall strategy remains unchanged on expectations of a $25/bbl oil price in the mid-1990s.
In addition, BP is considering possible reductions at its new corporate headquarters in Finsbury Square, London. This could involve placing some department functions with outside contractors.
Headquarters personnel were reduced by about 1,000 to 1,400 when the company moved to the new Britannic House building in 1990.
The company's main research and development facility at Sunbury, London, is likely to see a reduction of about 400 from its payroll of 2,000 persons.
BP Exploration and BP Oil will retain their $3.5 billion and $1.8 billion spending programs, respectively, set for 1992. Spending cuts will center on chemicals and other sections of the company.
Further job losses could emerge from the search by the businesses for lower costs and increased productivity.
BP Exploration, which had set a target of reducing its costs by 50cts/bbl by the end of 1993, advanced the target date to the end of 1992.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
