The author of The Sunday Times article, Danny Fortson, goes on to point out that the oil price slump could lead to a wave of big takeovers, failures and “mergers of desperation,” with BP a potential takeover target…
By John Donovan
Coverage of the problems facing BP are spread over a number of pages of The Sunday Times Business section today.
BP is responding to the fall in oil prices by slashing middle management and freezing projects that were based on an assumption that oil prices would remain at around $100 a barrel. Shell is likely to do the same.
The most prominent article, by Danny Fortson, describes BP’s involvement with the Putin regime as playing Russian roulette. He goes on to point out that the oil price slump could lead to a wave of big takeovers, failures and “mergers of desperation,” with BP a potential takeover target (also as a consequence of the Gulf spill).
So few were surprised last week when BP was, again, highlighted as a potential takeover target for rivals such as Royal Dutch Shell and ExxonMobil.
BP’s dramatic downsizing had also made it a favourite of the takeover rumour mill…
BBC News: BP quickens job cuts due to oil price fall: 7 December 2014
Oil giant BP is accelerating plans to cut hundreds of jobs within its back-office departments – many of them based in the UK and US.
The company, which has been downsizing since the oil spill in the Gulf of Mexico in 2010, said it had long planned the cuts, but is speeding up the process due to falling oil prices.
Crude prices have fallen by almost 40% this year, reducing oil firms’ margins.
BP employs almost 84,000 people worldwide, and some 15,000 in the UK.
In the US, the firm employs 20,000 people, many of whom are based in Texas.
“The fall in oil prices has added to the importance of making the organisation more efficient,” a BP spokesman told the BBC, “and the right size for the smaller portfolio we now have”.
Earlier on Sunday, The Sunday Times newspaper quoted BP’s finance director, Brian Gilvary, as saying “headcounts are starting to come down across all our activities”.
He added that the cuts would apply to “essentially the layers above operations”.
In the UK, BP has offices in London, Milton Keynes, Subury on Thames and Aberdeen, among other places.
In October, BP reported its third quarter replacement cost profits – which strip out volatility in oil prices – were $2.4bn (£1.5bn), down from $3.2bn in the same period last year.
The company, which says it is a third smaller than it was in 2010, is also still settling claims related to the Deepwater Horizon spill in the Gulf of Mexico.
As of September, compensation costs had reached $20bn, BP said.
The company will outline details of the planned job cuts on Wednesday