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BP freezes pay for 2015 as low oil prices prompt cutbacks

January 27, 2015
BP has frozen pay across the company for 2015 as it seeks to rein in costs in response to a 60pc fall in oil prices over the last six months
In a leaked internal memo to staff, chief executive Bod Dudley said: “The tougher external environment in 2015 means that our businesses and functions need to work…to take a number of measures in response to the harsh trading environment. One of the measures we are taking across the group is a general freeze to base pay for 2015, with only a few exceptions for specific circumstances around the world.”
Last week said that it was cutting 300 staff from its 3,500-strong workforce in the North Sea in response to the tougher operating environment caused by lower oil prices.
In December, BP said that it was looking at making savings from restructuring of around $1bn over the next five quarters but the recent fall in oil prices has brought added focus to that drive.
A spokesman told The Telegraph that the pay freeze was another measure in response to the sudden fall in oil prices since November, when the Organisation of Petroleum Exporting Countries (Opec) effectively launched a price war. Brent crude was trading again under $49 per barrel on Monday.
In response to the threat posed to oil industry jobs in the North Sea, the Chancellor, George Osborne, has ordered the Treasury to explore providing additional tax relief for companies working offshore. Aberdeen’s economy depends on the health of the oil and gas industry, which formed a key part of the independence campaign of Scottish nationalist Alex Salmond last year.
Sinopec-Talisman followed BP’s announcement of job cuts in the North Sea by announcing that 300 positions would be laid off in its operations in Scotland.
Meanwhile companies are cutting back capital expenditure globally. Royal Dutch Shell, the UK’s biggest oil company, said last week that it had decided not to press ahead with a $6.5bn plan to build a petrochemicals plant in Qatar.
By Andrew Critchlow
Source: Telegraph

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