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Leaked BP CEO Internal Memo

Screen Shot 2014-12-04 at 20.54.03It’s completed about $43 billion of asset sales since the 2010 oil spill in the Gulf of Mexico. The offshore disaster has cost London-based BP more than $28 billion in clean-up costs and damages, and the company is still fighting legal battles on multiple fronts.

BLOOMBERG NEWS ARTICLE

BP Chief Says Company Must Slim Down to Match Rivals on Costs

Dec 12, 2014 11:07 AM GMT

BP Plc (BP/), dealing with the lowest crude prices in five years, must cut jobs because costs are higher than at the oil company’s global competitors, the chief executive officer told staff this week.

“In many parts of BP, we have higher costs and larger teams than other companies operating at a similar scale,” Chief Executive Officer Bob Dudley said in an internal memo to staff obtained by Bloomberg. Programs are “well underway in many areas to streamline our work and refocus our activities.”

That means, along with certain positions being removed, some sites or plants may also be shut or sold, Dudley said.

BP, Europe’s third-largest oil company by market value, said on Dec. 10 said it anticipated about $1 billion of restructuring charges through next year as it overhauls operations. Competitors including Royal Dutch Shell Plc (RDSA) and Total SA (FP) are holding back capital spending as margins are squeezed by the 40 percent drop in prices since June.

“We have not only seen the recent dramatic fall in oil prices, but sensible expectation from investors who expect the industry to deliver value,” Dudley said.

BP plan to cut about $1 billion to $2 billion from a previous capital spending budget for 2015 of $24 billion to $26 billion,it said this week.

It’s completed about $43 billion of asset sales since the 2010 oil spill in the Gulf of Mexico. The offshore disaster has cost London-based BP more than $28 billion in clean-up costs and damages, and the company is still fighting legal battles on multiple fronts.

BP spokesman David Nicholas confirmed Dudley sent the internal memo earlier this week.

To contact the reporter on this story: Nidaa Bakhsh in London at [email protected]

To contact the editors responsible for this story: Will Kennedy at [email protected] Alex Devine

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