HOUSTON – BP and ConocoPhillips are shedding a combined 530 jobs in the North Sea in an effort to cut costs in Europe as oil prices plummet, becoming the latest to cull the oil industry’s workforce after Halliburton Co. and Apache Corp. announced layoffs earlier this week.
In separate announcements Thursday, the two companies said they’re targeting jobs that support the offshore oil fields between the United Kingdom and Norway that have seen operational challenges and maturing petroleum basins in recent years. London-based oil major BP said it expects to cut about 200 onshore staff and 100 contractor roles in coming months. Houston-based independent oil firm ConocoPhillips said it will let go of 230 jobs across the U.K., including at its main office in Scotland by March.
After a review of its U.K. business last year, ConocoPhillips decided to restructure the organization and cut positions “to ensure improvements in our U.K. cost structure,” company spokesman Kris Sava said in a written statement. Its U.K. business is separate from its Norway business, Sava said. “We regret having to make this difficult decision and will provide support to employees that will be affected.”
BP said it sees a long-term future in the North Sea, but that the region has seen “well-documented challenges of operating in this maturing region and in toughening market conditions,” BP’s North Sea regional president Trevor Garlick said in a written statement. “We are taking specific steps to ensure our business remains competitive and robust, and we are aligning with the wider industry.”
Meanwhile, oil field services giant Schlumberger confirmed it has made recent job cuts under the expected $200 million charge for ongoing adjustments to its workforce through 2015. Spokesman Stephen Harris refused to say where the jobs were located, how many were cut and when they were let go. But Harris confirmed these latest cuts are part of Schlumberger’s plan to reduce its workforce, which has previously been reported.
As oil prices fall and oil producers are expected to spend less on oil field services and tools, Schlumberger is “reducing overall headcount to meet the activity expected and achieve the most efficient deployment possible of our workforce,” Harris said.
“Reductions will be part of our continual effort to match resources worldwide with demand where possible,” he said. Schlumberger also said Thursday it will boost its quarterly dividend 25 percent, to 50 cents a share. It reports fourth quarter earnings Friday.
Pressure to curb costs has spread from oil producers to their oil field equipment makers. Oil spending next year could fall 30 percent, or about $58 billion, in North America if oil stays around $40 a barrel, according to Barclays. BP has said it will be laying off employees as it records $1 billion in restructuring charges over the next year related to severance packages and similar costs.
“The industry has been through an inflationary period that has reached an inflection point with the declining oil prices,” BP spokesman Brett Clanton said in an email. “We continue to strive to improve our competitiveness and therefore look for opportunities to remove unnecessary complexity and increase efficiency.”