More oil jobs under threat after BP wields the axe

Linda J. Dodson

BP’s moves come at a time when large European oil players are attempting to reinvent themselves.

BP, Shell, and Italy’s Eni have all announced plans to slash carbon emissions and gradually adjust their businesses for a world without fossil fuels. In a recent memo to staff, Shell’s chief executive said that the group would “go through a comprehensive review.”

The reality is that these reviews were on the horizon anyway, but Covid-19 and the destruction of demand for oil has accelerated the process of change.

In February, BP announced a huge restructuring, axing its traditional upstream and downstream model – which divides the business of extracting oil from that of selling it – to a system that puts more focus on green energy.

The company gave no detail on what the restructuring would cost, but its total bill could run to billions of pounds – and experts commented at the time that there would likely be drastic consequences for many of its 70,000 staff.

“BP is cutting out huge layers of management. [Looney is] rethinking the organisation,” says Gammel at Jefferies. With similar imperatives present at the other European oil majors, jobs cuts are almost guaranteed to follow.

Meanwhile, at the other end of the spectrum, rebounding oil prices have seemingly improved the situation for once-doomed US shale producers. US oil producers are in the money once more, as American oil prices continue to head towards $40 and the taps are turned back on.

Famously flexible, the US shale industry is capable of shutting down when prices go too low, and quickly ramping back up when oil prices reach more profitable levels again. 

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