BP has announced that it will not be cutting any jobs due to the coronavirus pandemic.
CEO Bernard Looney moved to reassure staff amid a collapse in oil prices and the severe economic impact wrought by the spreading coronavirus pandemic.
“Job security is a big worry at this time, so we have taken the decision that for the next three months no BP employees will be laid off as a result of virus-related cost cutting. We simply do not want to add another burden during what is already an incredibly stressful time for individuals and families,” Looney said.
The oil industry is under significant pressure as a collapse in oil prices threatens the profitability of production operations, and the coronavirus pandemic is curbing demand for fuels and downstream products.
Looney described the current situation as a “brutal environment” for the oil and gas industry though said he is confident it will come through it, noting that the company has around US$32bn in cash and undrawn facilities. He said BP will cut capital expenditure by around 25% this year to around US$12bn. This includes US$1bn worth of cuts upstream and another US$1bn downstream through its refining, petrochemicals and fuels marketing businesses.
As well as noting the measures taken to protect staff, including testing staff at its operations and reducing non-essential activity on projects, Looney praised the efforts the company and its staff have taken to help society respond to the pandemic. This has included providing free fuel for the emergency services including in the UK and Australia; donating stocks of personal protective equipment to health services; and its biofuels joint venture in Brazil diverting ethanol production to produce disinfectant for local health services.
“I want to recognise the courage and commitment of thousands of our people out in the field – in retail, offshore, at our plants and elsewhere. I also applaud the adaptability of everyone working from home as they support our operations,” he said.
The oil price has fallen to around US$25/bbl from more than US$60/bbl in January. A rift with Russia over crude supply strategy has led Saudi Arabia to flood the market with cheap crude as global restrictions on travel are sapping demand for fuels.
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